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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q

(Mark One)



|[X] | QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|--- | ---------------------------------------------------------------------------------------

For the quarterly period ended February 29, 2008

OR



|[    ] | TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|------ | ----------------------------------------------------------------------------------------

For the transition period from
 to

Commission File Number 1-4887

TEXAS INDUSTRIES, INC.

(Exact Name of Registrant as Specified in Its Charter)



|                                                               |  |  |  |                                  
|-------------------------------------------------------------- |  |  |  | ---------------------------------
|Delaware                                                       |  |  |  | 75-0832210                       
|(State or Other Jurisdiction of Incorporation or Organization) |  |  |  | (IRS Employer Identification No.)



| |  |                                                                                                                                                    |  | 
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------- |  | 
| |  | 1341 West Mockingbird Lane, Suite 700W, Dallas, Texas 75247-6913 (Address of Principal Executive Offices)                          
    (Zip Code) |  | 
| |  | Registrants Telephone Number, Including Area Code
(972) 647-6700                                                                                  |  | 

Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.   YesX  No

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act.
(Check one):



|                          |  |                   |  |                      
|------------------------- |  | ----------------- |  | ---------------------
|Large Accelerated Filer X |  | Accelerated Filer |  | Non-Accelerated Filer

Indicate by check mark whether the Registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).

Yes  NoX

There were 27,451,938 shares of the Registrants Common Stock, $1.00 par value, outstanding as of March 24, 2008.



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INDEX

TEXAS INDUSTRIES, INC. AND SUBSIDIARIES



|                              |  |                                                                                                                           |  |   
|----------------------------- |  | ------------------------------------------------------------------------------------------------------------------------- |  | --
|PART I. FINANCIAL INFORMATION |  | Page                                                                                                                     
|                              |  |                                                                                                                          
|Item 1.                       |  | Financial Statements                                                                                                      |  |   
|                              |  |                                                                                                                          
|                              |  | Consolidated Balance Sheets  February 29, 2008 and May 31, 2007                                                          |  | 3 
|                              |  |                                                                                                                          
|                              |  | Consolidated Statements of Operations  three months and nine months ended February 29, 2008 and February 28, 2007        |  | 4 
|                              |  |                                                                                                                          
|                              |  | Consolidated Statements of Cash Flows  nine months ended February 29, 2008 and February 28, 2007                         |  | 5 
|                              |  |                                                                                                                          
|                              |  | Notes to Consolidated Financial Statements                                                                                |  | 6 
|                              |  |                                                                                                                          
|                              |  | Report of Independent Registered Public Accounting Firm                                                                   |  | 23
|                              |  |                                                                                                                          
|Item 2.                       |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                                     |  | 24
|                              |  |                                                                                                                          
|Item 3.                       |  | Quantitative and Qualitative Disclosures About Market Risk -- the information required by this item is included in Item 2 |  | --
|                              |  |                                                                                                                          
|Item 4.                       |  | Controls and Procedures                                                                                                   |  | 30
|                              | 
|PART II. OTHER INFORMATION    |  |                                                                                                                          
|                              |  |                                                                                                                          
|Item 2.                       |  | Unregistered Sales of Equity Securities and Use of Proceeds                                                               |  | 30
|                              |  |                                                                                                                          
|Item 6.                       |  | Exhibits                                                                                                                  |  | 31
|                              | 
|SIGNATURES                    |  |                                                                                                                          



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CONSOLIDATED BALANCE SHEETS

TEXAS INDUSTRIES, INC. AND SUBSIDIARIES



|                                           |  |                       |   |  |   |           |  
|------------------------------------------ |  | --------------------- | - |  | - | --------- | -
|                                           |  | UnauditedFebruary 29, |   |  |   | May 31,   |  
|In thousands                               |  | 2008                  |   |  |   | 2007      |  
|                                           |  |                      
|ASSETS                                     |  |                       |   |  |   |           |  
|CURRENT ASSETS                             |  |                       |   |  |   |           |  
|Cash and cash equivalents                  |  | $       9,632         |   |  | $ | 15,138    |  
|Receivables  net                          |  | 151,708               |   |  |   | 142,610   |  
|Inventories                                |  | 123,735               |   |  |   | 121,467   |  
|Deferred income taxes and prepaid expenses |  | 22,482                |   |  |   | 17,621    |  
|                                           |  |                       |   |  |   |           |  
|TOTAL CURRENT ASSETS                       |  | 307,557               |   |  |   | 296,836   |  
|                                           |  |                      
|OTHER ASSETS                               |  |                       |   |  |   |           |  
|Goodwill                                   |  | 60,110                |   |  |   | 58,395    |  
|Real estate and investments                |  | 23,834                |   |  |   | 111,414   |  
|Deferred charges and intangibles           |  | 11,376                |   |  |   | 11,369    |  
|                                           |  |                       |   |  |   |           |  
|                                           |  | 95,320                |   |  |   | 181,178   |  
|                                           |  |                      
|PROPERTY, PLANT AND EQUIPMENT              |  |                       |   |  |   |           |  
|Land and land improvements                 |  | 133,033               |   |  |   | 132,992   |  
|Buildings                                  |  | 40,917                |   |  |   | 41,485    |  
|Machinery and equipment                    |  | 776,524               |   |  |   | 752,531   |  
|Construction in progress                   |  | 533,943               |   |  |   | 362,646   |  
|                                           |  |                       |   |  |   |           |  
|                                           |  | 1,484,417             |   |  |   | 1,289,654 |  
|Less depreciation and depletion            |  | 525,274               |   |  |   | 505,432   |  
|                                           |  |                       |   |  |   |           |  
|                                           |  | 959,143               |   |  |   | 784,222   |  
|                                           |  |                       |   |  |   |           |  
|                                           |  | $1,362,020            |   |  | $ | 1,262,236 |  
|                                           |  |                       |   |  |   |           |  
|                                           |  |                      
|LIABILITIES AND SHAREHOLDERS EQUITY       |  |                       |   |  |   |           |  
|CURRENT LIABILITIES                        |  |                       |   |  |   |           |  
|Accounts payable                           |  | $     89,895          |   |  | $ | 109,749   |  
|Accrued interest, wages and other items    |  | 42,754                |   |  |   | 57,891    |  
|Current portion of long-term debt          |  | 221                   |   |  |   | 1,340     |  
|                                           |  |                       |   |  |   |           |  
|TOTAL CURRENT LIABILITIES                  |  | 132,870               |   |  |   | 168,980   |  
|                                           |  |                      
|LONG-TERM DEBT                             |  | 344,438               |   |  |   | 274,416   |  
|                                           |  |                      
|DEFERRED INCOME TAXES AND OTHER CREDITS    |  | 90,274                |   |  |   | 90,358    |  
|                                           |  |                      
|SHAREHOLDERS EQUITY                       |  |                       |   |  |   |           |  
|Common stock, $1 par value                 |  | 27,452                |   |  |   | 27,323    |  
|Additional paid-in capital                 |  | 458,408               |   |  |   | 448,289   |  
|Retained earnings                          |  | 312,779               |   |  |   | 257,087   |  
|Accumulated other comprehensive loss       |  | (4,201                | ) |  |   | (4,217    | )
|                                           |  |                       |   |  |   |           |  
|                                           |  | 794,438               |   |  |   | 728,482   |  
|                                           |  |                       |   |  |   |           |  
|                                           |  | $1,362,020            |   |  | $ | 1,262,236 |  
|                                           |  |                       |   |  |   |           |  

See notes to consolidated financial statements.



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CONSOLIDATED STATEMENTS OF OPERATIONS

TEXAS INDUSTRIES, INC. AND SUBSIDIARIES



|                                    |  |                    |   |  |                   |   |  |              |   |  |              |  
|----------------------------------- |  | ------------------ | - |  | ----------------- | - |  | ------------ | - |  | ------------ | -
|                                    |  | Three months ended |   |  | Nine months ended |  
|                                    |  | February 29,       |   |  | February 28,      |   |  | February 29, |   |  | February 28, |  
|In thousands except per share       |  | 2008               |   |  | 2007              |   |  | 2008         |   |  | 2007         |  
|                                    |  |                    |   | 
|NET SALES                           |  | $230,535           |   |  | $216,771          |   |  | $762,462     |   |  | $734,255     |  
|                                    |  |                    |   | 
|Cost of products sold               |  | 190,980            |   |  | 169,702           |   |  | 616,688      |   |  | 569,097      |  
|                                    |  |                    |   |  |                   |   |  |              |   |  |              |  
|GROSS PROFIT                        |  | 39,555             |   |  | 47,069            |   |  | 145,774      |   |  | 165,158      |  
|                                    |  |                    |   | 
|Selling, general and administrative |  | 20,717             |   |  | 27,476            |   |  | 63,964       |   |  | 78,681       |  
|Interest                            |  | --                 |   |  | 3,289             |   |  | --           |   |  | 13,474       |  
|Other income                        |  | (2,086             | ) |  | (3,247            | ) |  | (7,781       | ) |  | (31,598      | )
|                                    |  |                    |   |  |                   |   |  |              |   |  |              |  
|                                    |  | 18,631             |   |  | 27,518            |   |  | 56,183       |   |  | 60,557       |  
|                                    |  |                    |   |  |                   |   |  |              |   |  |              |  
|INCOME BEFORE INCOME TAXES          |  | 20,924             |   |  | 19,551            |   |  | 89,591       |   |  | 104,601      |  
|                                    |  |                    |   | 
|Income taxes                        |  | 6,300              |   |  | 6,838             |   |  | 27,738       |   |  | 33,805       |  
|                                    |  |                    |   |  |                   |   |  |              |   |  |              |  
|NET INCOME                          |  | $  14,624          |   |  | $  12,713         |   |  | $  61,853    |   |  | $  70,796    |  
|                                    |  |                    |   |  |                   |   |  |              |   |  |              |  
|                                    |  |                    |   | 
|Net income per share                |  |                    |   |  |                   |   |  |              |   |  |              |  
|Basic                               |  | $        .53       |   |  | $        .52      |   |  | $      2.26  |   |  | $      2.93  |  
|Diluted                             |  | $        .53       |   |  | $        .50      |   |  | $      2.22  |   |  | $      2.71  |  
|                                    |  |                    |   |  |                   |   |  |              |   |  |              |  
|                                    |  |                    |   | 
|Average shares outstanding          |  |                    |   |  |                   |   |  |              |   |  |              |  
|Basic                               |  | 27,398             |   |  | 24,438            |   |  | 27,359       |   |  | 24,133       |  
|Diluted                             |  | 27,810             |   |  | 27,771            |   |  | 27,852       |   |  | 27,629       |  
|                                    |  |                    |   |  |                   |   |  |              |   |  |              |  
|                                    |  |                    |   | 
|Cash dividends per share            |  | $      .075        |   |  | $      .075       |   |  | $      .225  |   |  | $      .225  |  
|                                    |  |                    |   |  |                   |   |  |              |   |  |              |  

See notes to consolidated financial statements.



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CONSOLIDATED STATEMENTS OF CASH FLOWS

TEXAS INDUSTRIES, INC. AND SUBSIDIARIES



|                                                                             |  |                   |   |  |              |  
|---------------------------------------------------------------------------- |  | ----------------- | - |  | ------------ | -
|                                                                             |  | Nine months ended |  
|                                                                             |  | February 29,      |   |  | February 28, |  
|In thousands                                                                 |  | 2008              |   |  | 2007         |  
|                                                                             |  |                  
|OPERATING ACTIVITIES                                                         |  |                   |   |  |              |  
|Net income                                                                   |  | $   61,853        |   |  | $   70,796   |  
|Adjustments to reconcile net income to cash provided by operating activities |  |                   |   |  |              |  
|Gain on asset disposals                                                      |  | (1,196            | ) |  | (570         | )
|Depreciation, depletion and amortization                                     |  | 40,980            |   |  | 33,856       |  
|Deferred income taxes                                                        |  | 4,654             |   |  | 16,830       |  
|Stock-based compensation expense (credit)                                    |  | (2,688            | ) |  | 10,268       |  
|Excess tax benefits from stock-based compensation                            |  | (3,519            | ) |  | (1,647       | )
|Other  net                                                                  |  | 1,307             |   |  | 1,559        |  
|Changes in operating assets and liabilities                                  |  |                   |   |  |              |  
|Receivables  net                                                            |  | (9,045            | ) |  | 4,540        |  
|Inventories                                                                  |  | (2,268            | ) |  | (12,259      | )
|Prepaid expenses                                                             |  | 2,206             |   |  | 3,910        |  
|Accounts payable and accrued liabilities                                     |  | (15,967           | ) |  | (1,532       | )
|                                                                             |  |                   |   |  |              |  
|Net cash provided by operating activities                                    |  | 76,317            |   |  | 125,751      |  
|                                                                             |  |                  
|INVESTING ACTIVITIES                                                         |  |                   |   |  |              |  
|Capital expenditures  expansions                                            |  | (193,160          | ) |  | (175,000     | )
|Capital expenditures  other                                                 |  | (48,520           | ) |  | (61,439      | )
|Proceeds from asset disposals                                                |  | 3,928             |   |  | 961          |  
|Purchases of short-term investments                                          |  | --                |   |  | (8,500       | )
|Sales of short-term investments                                              |  | --                |   |  | 59,000       |  
|Investments in life insurance contracts                                      |  | 88,140            |   |  | (5,288       | )
|Other  net                                                                  |  | 218               |   |  | (125         | )
|                                                                             |  |                   |   |  |              |  
|Net cash used by investing activities                                        |  | (149,394          | ) |  | (190,391     | )
|                                                                             |  |                  
|FINANCING ACTIVITIES                                                         |  |                   |   |  |              |  
|Long-term borrowings                                                         |  | 213,000           |   |  | --           |  
|Debt retirements                                                             |  | (144,313          | ) |  | (1,285       | )
|Debt issuance and retirement costs                                           |  | (1,152            | ) |  | (4           | )
|Stock option exercises                                                       |  | 2,678             |   |  | 5,976        |  
|Excess tax benefits from stock-based compensation                            |  | 3,519             |   |  | 1,647        |  
|Common dividends paid                                                        |  | (6,161            | ) |  | (5,468       | )
|                                                                             |  |                   |   |  |              |  
|Net cash provided by financing activities                                    |  | 67,571            |   |  | 866          |  
|                                                                             |  |                   |   |  |              |  
|Decrease in cash and cash equivalents                                        |  | (5,506            | ) |  | (63,774      | )
|                                                                             |  |                  
|Cash and cash equivalents at beginning of period                             |  | 15,138            |   |  | 84,139       |  
|                                                                             |  |                   |   |  |              |  
|Cash and cash equivalents at end of period                                   |  | $     9,632       |   |  | $   20,365   |  
|                                                                             |  |                   |   |  |              |  

See notes to consolidated financial statements.



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Texas Industries, Inc. and subsidiaries is a leading
supplier of heavy building materials in the United States through three business segments: cement, aggregates and consumer products, which produce and sell cement; stone, sand and gravel and expanded shale and clay aggregate; and ready-mix concrete
and packaged concrete and related products, respectively, from facilities concentrated primarily in Texas, Louisiana and California. When used in these notes the terms Company, we, us, or our mean
Texas Industries, Inc. and subsidiaries unless the context indicates otherwise.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting
principles for interim financial information and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and notes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the nine-month period ended February 29, 2008,
are not necessarily indicative of the results that may be expected for the year ended May 31, 2008. For further information, refer to the consolidated financial statements and notes thereto included in the Annual Report on Form 10-K of Texas
Industries, Inc. for the year ended May 31, 2007.

Principles of Consolidation. The consolidated financial
statements include the accounts of Texas Industries, Inc. and all subsidiaries except a former subsidiary trust, in which we had a variable interest but were not the primary beneficiary. Certain amounts in the prior period financial statements have
been reclassified to conform to the current period presentation.

Estimates. The preparation of financial statements
and accompanying notes in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ from those estimates.

Cash and Cash Equivalents. Investments with maturities of less than 90 days when purchased are classified as cash equivalents and
consist primarily of money market funds and investment grade commercial paper issued by major corporations and financial institutions.

Receivables.Management evaluates the ability to collect accounts receivable based on a combination of factors. A reserve for doubtful accounts is maintained based on the length of time receivables are past due
or the status of a customers financial condition. If we are aware of a specific customers inability to make required payments, specific amounts are added to the reserve.

Environmental Liabilities.We are subject to environmental laws and regulations established by federal, state and local
authorities, and make provision for the estimated costs related to compliance when it is probable that a reasonably estimable liability has been incurred.

Legal Contingencies.We are a defendant in lawsuits which arose in the normal course of business, and make provision for the estimated loss from any claim or legal proceeding when it is probable that a
reasonably estimable liability has been incurred.

Long-lived Assets.Management reviews long-lived assets for
impairment whenever changes in circumstances indicate that the carrying amount of the assets may not be recoverable and would record an impairment charge if necessary. Such evaluations compare the carrying amount of an asset to future undiscounted
net cash flows expected to be generated by the asset and are significantly impacted by estimates of future prices for our products, capital needs, economic trends and other factors.

Property, plant and equipment is recorded at cost. Costs incurred to construct certain long-lived assets include capitalized interest
which is amortized over the estimated useful life of the related asset. Interest is capitalized during the construction period of qualified assets based on the average amount of accumulated expenditures and the weighted average interest rate
applicable to borrowings outstanding during the period. If accumulated expenditures exceed applicable borrowings outstanding during the period, capitalized interest is allocated to projects under construction on a pro rata basis. Provisions for
depreciation are computed generally using the straight-line method. Provisions for depletion of mineral deposits are computed on the basis of the estimated quantity of recoverable raw materials. Useful lives for our primary operating facilities
range from 10 to 25 years.



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Major Maintenance Activities.Maintenance and repairs are charged to expense as
incurred. Effective June 1, 2007, we adopted Financial Accounting Standards Board FSP AUG AIR-1, Accounting for Planned Major Maintenance Activities. This FSP addresses the planned major maintenance of assets and prohibits the use
of the accrue-in-advance method of accounting for these activities. The adoption of this FSP did not have any impact on our consolidated financial statements.

Goodwill. Management tests goodwill for impairment at least annually by reporting unit. If the carrying amount of the goodwill exceeds its fair value, an impairment loss is recognized. In
applying a fair-value-based test, estimates are made of the expected future cash flows to be derived from the reporting unit. Similar to the review for impairment of other long-lived assets, the resulting fair value determination is significantly
impacted by estimates of future prices for our products, capital needs, economic trends and other factors. Goodwill having a carrying value of $58.4 million at February 29, 2008 and May 31, 2007 resulted primarily from the acquisition of
Riverside Cement Company and is identified with our California cement operations. Goodwill having a carrying value of $1.7 million at February 29, 2008 resulted from the acquisition of ready-mix operations in Texas and Louisiana and is
identified with our consumer products operations. In each case, the fair value of the reporting unit exceeds its carrying value.

Real Estate and Investments.Surplus real estate and real estate acquired for development of high quality industrial, office or multi-use parks totaled $6.0 million at February 29, 2008 and $6.2 million at May 31, 2007.

Investments are composed primarily of life insurance contracts purchased in connection with certain of our benefit plans.
The contracts, recorded at their net cash surrender value, totaled $17.8 million (net of distributions of $77.7 million plus accrued interest) at February 29, 2008 and $105.0 million (net of distributions of $1.2 million plus accrued interest)
at May 31, 2007. We can elect to receive distributions chargeable against the cash surrender value of the policies in the form of borrowings or withdrawals or we can elect to surrender the policies and receive their net cash surrender value.
Distributions and policy surrenders totaling $92.6 million were received during the nine-month period ended February 29, 2008.

Deferred Charges and Intangibles.Deferred charges are composed primarily of debt issuance costs that totaled $5.7 million at February 29, 2008 and $5.4 million at May 31, 2007. The costs are amortized over the term of the
related debt.

Intangibles are composed of non-compete agreements and other intangibles with finite lives being amortized
on a straight-line basis over periods of 2 to 15 years. Their carrying value, adjusted for write-offs, totaled $1.0 million (net of accumulated amortization of $3.0 million) at February 29, 2008 and $1.1 million (net of accumulated amortization
of $2.8 million) at May 31, 2007. Amortization expense incurred was $200,000 in each of the nine-month periods ended February 29, 2008 and February 28, 2007. Estimated amortization expense for each of the five years succeeding
February 29, 2008 is approximately $300,000 for 2009 through 2011, $100,000 for 2012, and none for 2013.

Other
Credits.Other credits, composed primarily of liabilities related to our retirement plans, deferred compensation agreements and asset retirement obligations, totaled $57.9 million at February 29, 2008 and $62.9 million at May 31, 2007.

Asset Retirement Obligations.We record a liability for legal obligations associated with the retirement of our
long-lived assets in the period in which it is incurred if a reasonable estimate of fair value of the obligation can be made. The discounted fair value of the obligation incurred in each period is added to the carrying amount of the associated
assets and depreciated over the lives of the assets. The liability is accreted at the end of each period through a charge to operating expense. A gain or loss on settlement is recognized if the obligation is settled for other than the carrying
amount of the liability.

We incur legal obligations for asset retirement as part of our normal operations related to land
reclamation, plant removal and Resource Conservation and Recovery Act closures. Determining the amount of an asset retirement liability requires estimating the future cost of contracting with third parties to perform the obligation. The estimate is
significantly impacted by, among other considerations, managements assumptions regarding the scope of the work required, labor costs, inflation rates, market-risk premiums and closure dates.



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Changes in asset retirement obligations are as follows:



|                               |  |                   |   |  |              |  
|------------------------------ |  | ----------------- | - |  | ------------ | -
|                               |  | Nine months ended |  
|                               |  | February 29,      |   |  | February 28, |  
|In thousands                   |  | 2008              |   |  | 2007         |  
|                               |  |                  
|Balance at beginning of period |  | $4,987            |   |  | $4,346       |  
|Additions                      |  | 259               |   |  | 811          |  
|Accretion expense              |  | 302               |   |  | 282          |  
|Settlements                    |  | (524              | ) |  | (550         | )
|                               |  |                   |   |  |              |  
|Balance at end of period       |  | $5,024            |   |  | $4,889       |  
|                               |  |                   |   |  |              |  

Accumulated Other Comprehensive Loss.Amounts recognized in accumulated
other comprehensive loss represent adjustments related to a defined benefit retirement plan and a postretirement health benefit plan covering approximately 600 employees and retirees of our California cement subsidiary. The amounts totaled $4.2
million (net of tax of $2.5 million) at February 29, 2008 and May 31, 2007.

Comprehensive income for the
three-month and nine-month periods ending February 29, 2008 and February 28, 2007 consisted of net income and amounts in accumulated other comprehensive loss recognized as components of net periodic postretirement benefit cost, net of tax.
These recognized amounts were not significant, and therefore, comprehensive income approximated net income for the periods.

Net Sales. Sales are recognized when title has transferred and products are delivered. We include delivery fees in the amount we bill customers to the extent needed to recover our cost of freight and delivery. Net sales are presented
as revenues including these delivery fees.

Other Income.Routine sales of surplus operating assets and real estate
resulted in gains of $300,000 in each of the three-month periods ended February 29, 2008 and February 28, 2007 and $2.3 million and $2.9 million in the nine-month periods ended February 29, 2008 and February 28, 2007,
respectively. Interest income totaled $500,000 and $1.2 million in the three-month periods ended February 29, 2008 and February 28, 2007, respectively, and $1.4 million and $5.2 million in the nine-month periods ended February 29,
2008 and February 28, 2007, respectively.

Other income in the three-month and nine-month periods ended
February 28, 2007 includes $19.8 million representing distributions which we received pursuant to agreements that settled a 16-year dispute over the U.S. antidumping duty order on cement imports from Mexico.

Income Taxes. Accounting for income taxes uses the liability method of recognizing and classifying deferred income taxes. Texas
Industries, Inc. (the parent company) joins in filing a consolidated return with its subsidiaries. Current and deferred tax expense is allocated among the members of the group based on a stand-alone calculation of the tax of the individual member.
Accrued interest and penalties related to unrecognized tax benefits are recognized in income tax expense.

Stock-based
Compensation.Effective June 1, 2006, we adopted SFAS No. 123R, Share-Based Payment, utilizing the modified prospective transition method. Under this transition method, we account for awards granted prior to adoption, but
for which the vesting period is not complete, on a prospective basis with expense being recognized in our statement of operations based on the grant date fair value estimated in accordance with SFAS No. 123, Accounting for Stock-Based
Compensation. We use the Black-Scholes option-pricing model to determine the fair value of stock options granted as of the date of grant. Options with graded vesting are valued as single awards and the related compensation cost is recognized
using a straight-line attribution method over the shorter of the vesting period or required service period adjusted for estimated forfeitures. We use the average stock price on the date of grant to determine the fair value of restricted stock awards
paid. A liability, which is included in other credits, is recorded for stock appreciation rights, deferred compensation agreements and stock awards expected to be paid in cash, based on the average stock price at the end of each period until such
awards are paid.



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Earnings Per Share(EPS). Basic EPS is computed by adjusting net
income for the participation in earnings of unvested restricted shares outstanding, then dividing by the weighted-average number of common shares outstanding during the period including contingently issuable shares and excluding outstanding unvested
restricted shares.

Contingently issuable shares relate to deferred compensation agreements in which directors elected to
defer annual and meeting fees and vested shares under our former stock awards program. The deferred compensation is denominated in shares of our common stock and issued in accordance with the terms of the agreement subsequent to retirement or
separation from us. The shares are considered contingently issuable because the director has an unconditional right to the shares to be issued. Vested stock award shares are issued in the year in which the employee reaches age 60.

Diluted EPS adjusts net income and the outstanding shares for the dilutive effect of convertible subordinated debentures, stock options,
restricted shares and awards.

Basic and Diluted EPS are calculated as follows:



|                                                            |  |                    |   |  |                   |   |  |              |   |  |              |  
|----------------------------------------------------------- |  | ------------------ | - |  | ----------------- | - |  | ------------ | - |  | ------------ | -
|                                                            |  | Three months ended |   |  | Nine months ended |  
|                                                            |  | February 29,       |   |  | February 28,      |   |  | February 29, |   |  | February 28, |  
|In thousands except per share                               |  | 2008               |   |  | 2007              |   |  | 2008         |   |  | 2007         |  
|                                                            |  |                    |   | 
|Basic earnings                                              |  |                    |   |  |                   |   |  |              |   |  |              |  
|Net income                                                  |  | $14,624            |   |  | $12,713           |   |  | $61,853      |   |  | $70,796      |  
|Unvested restricted shareparticipation                      |  | (7                 | ) |  | (5                | ) |  | (30          | ) |  | (24          | )
|                                                            |  |                    |   |  |                   |   |  |              |   |  |              |  
|Basic income                                                |  | $14,617            |   |  | $12,708           |   |  | $61,823      |   |  | $70,772      |  
|                                                            |  |                    |   |  |                   |   |  |              |   |  |              |  
|Diluted earnings                                            |  |                    |   |  |                   |   |  |              |   |  |              |  
|Net income                                                  |  | $14,624            |   |  | $12,713           |   |  | $61,853      |   |  | $70,796      |  
|Interest on convertible subordinateddebentures - net of tax |  | --                 |   |  | 1,284             |   |  | --           |   |  | 4,138        |  
|Unvested restricted shareparticipation                      |  | (7                 | ) |  | (5                | ) |  | (30          | ) |  | (24          | )
|                                                            |  |                    |   |  |                   |   |  |              |   |  |              |  
|Diluted income                                              |  | $14,617            |   |  | $13,992           |   |  | $61,823      |   |  | $74,910      |  
|                                                            |  |                    |   |  |                   |   |  |              |   |  |              |  
|                                                            |  |                    |   | 
|Shares                                                      |  |                    |   |  |                   |   |  |              |   |  |              |  
|Weighted-average sharesoutstanding                          |  | 27,405             |   |  | 24,441            |   |  | 27,366       |   |  | 24,135       |  
|Contingently issuable shares                                |  | 7                  |   |  | 7                 |   |  | 7            |   |  | 7            |  
|Unvested restricted shares                                  |  | (14                | ) |  | (10               | ) |  | (14          | ) |  | (9           | )
|                                                            |  |                    |   |  |                   |   |  |              |   |  |              |  
|Basic weighted-average shares                               |  | 27,398             |   |  | 24,438            |   |  | 27,359       |   |  | 24,133       |  
|                                                            |  |                    |   | 
|Convertible subordinated debentures                         |  | --                 |   |  | 2,785             |   |  | --           |   |  | 3,003        |  
|Stock option, restricted share andaward dilution            |  | 412                |   |  | 548               |   |  | 493          |   |  | 493          |  
|                                                            |  |                    |   |  |                   |   |  |              |   |  |              |  
|Diluted weighted-average shares*                            |  | 27,810             |   |  | 27,771            |   |  | 27,852       |   |  | 27,629       |  
|                                                            |  |                    |   |  |                   |   |  |              |   |  |              |  
|                                                            |  |                    |   | 
|Net income per share                                        |  |                    |   |  |                   |   |  |              |   |  |              |  
|Basic                                                       |  | $      .53         |   |  | $      .52        |   |  | $    2.26    |   |  | $    2.93    |  
|Diluted                                                     |  | $      .53         |   |  | $      .50        |   |  | $    2.22    |   |  | $    2.71    |  
|                                                            |  |                    |   |  |                   |   |  |              |   |  |              |  
|*  Shares excluded due to antidilutive effect               |  |                    |   |  |                   |   |  |              |   |  |              |  
|Stock options, restricted sharesand awards                  |  | 200                |   |  | --                |   |  | 67           |   |  | 73           |  



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##### Table of Contents

WORKING CAPITAL

Working capital totaled $174.7 million at February 29, 2008, compared to $127.9 million at May 31, 2007.

Receivables consist of:



|                                            |  |              |  |         
|------------------------------------------- |  | ------------ |  | --------
|                                            |  | February 29, |  | May 31, 
|In thousands                                |  | 2008         |  | 2007    
|                                            |  |             
|Accounts receivable                         |  | $129,076     |  | $121,282
|Notes receivable including accrued interest |  | 22,632       |  | 21,328  
|                                            |  |              |  |         
|                                            |  | $151,708     |  | $142,610
|                                            |  |              |  |         

Accounts receivable are presented net of allowances for doubtful receivables of
$1.7 million at February 29, 2008 and $1.3 million at May 31, 2007. Provisions for bad debts charged to expense were $700,000 and $400,000 in the nine-month periods ended February 29, 2008 and February 28, 2007, respectively.
Uncollectible accounts written off totaled $300,000 in each of the nine-month periods ended February 29, 2008 and February 28, 2007. Notes receivable included in current receivables relate to routine sales of surplus operating assets and
real estate.

Inventories consist of:



|                               |  |              |  |          
|------------------------------ |  | ------------ |  | ---------
|                               |  | February 29, |  | May 31,  
|In thousands                   |  | 2008         |  | 2007     
|                               |  |             
|Finished products              |  | $  10,055    |  | $  12,190
|Work in process                |  | 56,828       |  | 56,628   
|Raw materials                  |  | 20,644       |  | 16,300   
|                               |  |              |  |          
|Total inventories at LIFO cost |  | 87,527       |  | 85,118   
|Parts and supplies             |  | 36,208       |  | 36,349   
|                               |  |              |  |          
|Total inventories              |  | $123,735     |  | $121,467 
|                               |  |              |  |          

Inventories are stated at cost (not in excess of market) with finished products,
work in process and raw material inventories using the last-in, first-out (LIFO) method and parts and supplies inventories using the average cost method. An actual valuation of inventory under the LIFO method can be made only at the end
of each year based on the inventory levels and costs at that time. Accordingly, interim LIFO calculations are based on managements estimates of expected year-end inventory levels and costs and are subject to the final year-end LIFO inventory
valuation. If the average cost method (which approximates current replacement cost) had been used for all of these inventories, inventory values would have been higher by $27.6 million at February 29, 2008 and $27.0 million at May 31,
2007.

Accrued interest, wages and other items consist of:



|                         |  |              |  |         
|------------------------ |  | ------------ |  | --------
|                         |  | February 29, |  | May 31, 
|In thousands             |  | 2008         |  | 2007    
|                         |  |             
|Interest                 |  | $  2,519     |  | $  7,029
|Employee compensation    |  | 27,826       |  | 36,942  
|Income taxes             |  | 1,366        |  | 1,316   
|Property taxes and other |  | 11,043       |  | 12,604  
|                         |  |              |  |         
|                         |  | $42,754      |  | $57,891 
|                         |  |              |  |         



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LONG-TERM DEBT

Long-term debt consists of:



|                                                                            |  |              |   |  |           |  
|--------------------------------------------------------------------------- |  | ------------ | - |  | --------- | -
|                                                                            |  | February 29, |   |  | May 31,   |  
|In thousands                                                                |  | 2008         |   |  | 2007      |  
|Senior revolving credit facility expiring in 2012                           |  | $  85,000    |   |  | $  15,000 |  
|Senior notes due 2013, interest rate 7.25%                                  |  | 250,000      |   |  | 250,000   |  
|Pollution control bonds due through 2007, interestrate 6.19% (75% of prime) |  | --           |   |  | 1,135     |  
|Other                                                                       |  | 322          |   |  | 354       |  
|                                                                            |  |              |   |  |           |  
|                                                                            |  | 335,322      |   |  | 266,489   |  
|Capital lease obligation                                                    |  | 9,337        |   |  | 9,267     |  
|Less current portion                                                        |  | (221         | ) |  | (1,340    | )
|                                                                            |  |              |   |  |           |  
|                                                                            |  | $344,438     |   |  | $274,416  |  
|                                                                            |  |              |   |  |           |  

Senior Revolving Credit Facility.On August 15, 2007, we amended and
restated our June 30, 2005 credit agreement. The amended and restated credit agreement continues to provide for a $200 million senior revolving credit facility, but the credit facility is no longer secured and the principal amount may be
increased by up to an additional $100 million at our option, provided that the lenders that are parties to the amended and restated credit agreement and such additional lenders as are invited by us and approved by the administrative agent provide
commitments for the additional principal amount. The credit facility expires on August 15, 2012. It includes a $50 million sub-limit for letters of credit. Any outstanding letters of credit are deducted from the borrowing availability under the
facility. At February 29, 2008, $85.0 million was outstanding under the facility and an additional $26.2 million of the facility was utilized to support letters of credit. Amounts drawn under the facility bear interest either at the LIBOR rate
plus a margin of .75% to 2%, or at a base rate (which is the higher of the federal funds rate plus 0.5% and the prime rate) plus a margin of up to 1%. The interest rate margins are subject to adjustments based on our leverage ratio. Commitment fees
are payable currently at an annual rate of .25% on the unused portion of the facility. All of our consolidated subsidiaries have guaranteed our obligations under the credit facility. We may terminate the facility at any time.

The credit facility contains covenants restricting, among other things, prepayment or redemption of the senior notes, distributions,
dividends and repurchases of capital stock and other equity interests, acquisitions and investments, indebtedness, liens and affiliate transactions. We are required to comply with certain financial tests and to maintain certain financial ratios,
such as leverage and interest coverage ratios. We were in compliance with all of our loan covenants as of February 29, 2008.

7.25% Senior Notes.At any time on or prior to July 15, 2009, we may redeem the notes at a redemption price equal to the sum of the principal amount thereof, plus accrued interest and a make-whole premium. On and after
July 15, 2009, we may redeem the notes at a premium of 103.625% in 2009, 101.813% in 2010 and 100% in 2011 and thereafter. In addition, prior to July 15, 2008, we may redeem up to 35% of the aggregate principal amount of the notes at a
redemption price equal to 107.25% of the principal amount thereof, plus accrued interest with the net cash proceeds from certain equity offerings. If we experience a change of control, we may be required to offer to purchase the notes at a purchase
price equal to 101% of the principal amount, plus accrued interest.

All of our consolidated subsidiaries have
unconditionally guaranteed the 7.25% Senior Notes. The indenture governing the notes contains covenants that will limit our ability and the ability of our subsidiaries to, among other things, incur additional indebtedness, pay dividends or make
other distributions or repurchase or redeem our stock, make investments, sell assets, incur liens, enter into agreements restricting our subsidiaries ability to pay dividends, enter into transactions with affiliates and consolidate, merge or
sell all or substantially all of our assets.

Term Credit Agreement.On March 20, 2008, we entered into a term
credit agreement that provides for an unsecured $150 million senior term loan maturing through August 15, 2012. The net proceeds were used to repay borrowings outstanding under our senior revolving credit facility in the amount of $85 million,
with the additional proceeds available for general corporate purposes. The outstanding principal amount of the term loan will bear interest either at LIBOR rate plus a margin of 2.25% or at a base rate (which will be the higher of the federal funds
rate plus 0.5% and the prime rate) plus a margin of 1.25% to 1.50%. The interest rate margins are based on our leverage ratio. We may repay the term loan at any time without penalty. We must mandatorily prepay the term loan in the amount of the net
cash proceeds from issuances of any additional senior notes or from certain asset sales.



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Similar to our senior revolving credit agreement, the term credit agreement contains a
number of negative covenants restricting, among other things, prepayment or redemption of the senior notes, distributions and dividends on and repurchases of capital stock and other equity interests, acquisitions and investments, indebtedness, liens
and affiliate transactions. We are required to comply with certain financial tests and to maintain certain financial ratios, such as leverage and interest coverage ratios.

Other.Maturities of long-term debt, including the new senior term loan but excluding the capital lease obligation, for each of the five years succeeding February 29, 2008 are $5.6
million for 2009, $7.5 million for 2010, $24.4 million for 2011, $30.0 million for 2012 and $167.5 million for 2013. The total amount of interest paid was $22.7 million and $25.4 million during the nine-month periods ended February 29, 2008 and
February 28, 2007, respectively. Interest capitalized was $20.8 million and $8.1 million during the nine-month periods ended February 29, 2008 and February 28, 2007, respectively.

COMMITMENTS

During fiscal
year 2006, we commenced construction on a project to expand and modernize our Oro Grande, California cement plant. We are constructing approximately 2.3 million tons of advanced dry process annual cement production capacity, and plan to retire
the 1.3 million tons of existing, but less efficient, production after the new plant is commissioned. As of February 29, 2008, we have expended $408.4 million, excluding capitalized interest of $34.2 million related to the project, and
have begun the commissioning process.

During October 2007, we commenced construction on a project to expand our Hunter,
Texas cement plant. We are expanding the Hunter plant by approximately 1.4 million tons of advanced dry process annual cement production capacity. The 900,000 tons of existing annual cement production capacity will remain in operation. We
currently expect the Hunter project will cost from $325 to $350 million, excluding estimated capitalized interest of $20 million related to the project. As of February 29, 2008, we have expended $44.5 million, excluding capitalized interest of
$900,000 related to the project. We currently expect to start commissioning the new kiln system during the winter of fiscal year 2010.

SHAREHOLDERS EQUITY

Common stock consists of:



|                                            |  |              |  |        
|------------------------------------------- |  | ------------ |  | -------
|                                            |  | February 29, |  | May 31,
|In thousands                                |  | 2008         |  | 2007   
|                                            |  |             
|Shares authorized                           |  | 100,000      |  | 40,000 
|Shares outstanding                          |  | 27,452       |  | 27,323 
|Shares reserved for stock options and other |  | 3,159        |  | 3,334  

There are authorized 100,000 shares of Cumulative Preferred Stock, no par value,
of which 20,000 shares are designated $5 Cumulative Preferred Stock (Voting), redeemable at $105 per share and entitled to $100 per share upon dissolution. An additional 40,000 shares are designated Series B Junior Participating Preferred Stock. The
Series B Preferred Stock is not redeemable and ranks, with respect to the payment of dividends and the distribution of assets, junior to (i) all other series of the Preferred Stock unless the terms of any other series shall provide otherwise
and (ii) the $5 Cumulative Preferred Stock. No shares of Cumulative Preferred Stock or Series B Junior Participating Preferred Stock were outstanding as of February 29, 2008. Pursuant to a Rights Agreement, in November 2006, we distributed
a dividend of one preferred share purchase right for each outstanding share of our Common Stock. Each right entitles the holder to purchase from us one one-thousandth of a share of the Series B Junior Participating Preferred Stock at a price of
$300, subject to adjustment. The rights will expire on November 1, 2016 unless the date is extended or the rights are earlier redeemed or exchanged by us pursuant to the Rights Agreement.



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STOCK-BASED COMPENSATION PLANS

The Texas Industries, Inc. 2004 Omnibus Equity Compensation Plan (the 2004 Plan) provides that, in addition to other types of awards, non-qualified and incentive stock options to
purchase Common Stock may be granted to employees and non-employee directors at market prices at date of grant. In addition, non-qualified and incentive stock options remain outstanding under our 1993 Stock Option Plan. During 2006, our Board of
Directors approved the amendment of certain options to conform the change of control provisions in such options with the terms of our other agreements.

Options become exercisable in installments beginning one year after date of grant and expire ten years later. The fair value of each option grant was estimated on the date of grant using the
Black-Scholes option pricing model. Options with graded vesting are valued as single awards and the compensation cost recognized using a straight-line attribution method over the shorter of the vesting period or required service period adjusted for
estimated forfeitures. The following table sets forth the information about the weighted-average grant date fair value of options granted during the nine-month periods ended February 29, 2008 and February 28, 2007.



|                                       |  |                   |   |  |              |  
|-------------------------------------- |  | ----------------- | - |  | ------------ | -
|                                       |  | Nine months ended |  
|                                       |  | February 29,      |   |  | February 28, |  
|                                       |  | 2008              |   |  | 2007         |  
|                                       |  |                  
|Weighted average grant date fair value |  | $17.59            |   |  | $27.61       |  
|Weighted average assumptions used:     |  |                   |   |  |              |  
|Expected volatility                    |  | .317              |   |  | .330         |  
|Expected lives                         |  | 6.1               |   |  | 6.0          |  
|Risk-free interest rates               |  | 3.21              | % |  | 4.78         | %
|Expected dividend yields               |  | .59               | % |  | .43          | %

Expected volatility is based on an analysis of historical volatility of our common
stock. Expected lives of options is determined based on the historical share option exercise experience of our optionees. Risk-free interest rates are determined using the implied yield currently available for zero coupon U.S. treasury issues with a
remaining term equal to the expected life of the options. Expected dividend yields are based on the approved annual dividend rate in effect and the market price of our common stock at the time of grant.

A summary of option transactions for the nine-month period ended February 29, 2008, follows:



|                                 |  |                     |   |  |                              
|-------------------------------- |  | ------------------- | - |  | -----------------------------
|                                 |  | Shares Under Option |   |  | Weighted-Average Option Price
|                                 |  |                    
|Outstanding at May 31, 2007      |  | 1,483,035           |   |  | $36.31                       
|Granted                          |  | 212,850             |   |  | 50.63                        
|Exercised                        |  | (163,311            | ) |  | 31.18                        
|Canceled                         |  | (9,900              | ) |  | 56.33                        
|                                 |  |                     |   |  |                              
|Outstanding at February 29, 2008 |  | 1,522,674           |   |  | $38.73                       
|                                 |  |                     |   |  |                              
|Exercisable at February 29, 2008 |  | 854,971             |   |  | $29.70                       
|                                 |  |                     |   |  |                              

The following table summarizes information about stock options outstanding as of
February 29, 2008.



|                                         |  |                          |  |                 |  |                
|---------------------------------------- |  | ------------------------ |  | --------------- |  | ---------------
|                                         |  | Range of Exercise Prices
|                                         |  | $16.04 - $27.39          |  | $31.15 - $45.86 |  | $50.63 - $70.18
|Options outstanding                      |  |                          |  |                 |  |                
|Shares outstanding                       |  | 600,016                  |  | 303,658         |  | 619,000        
|Weighted-average remaining lifein years  |  | 4.29                     |  | 4.66            |  | 8.88           
|Weighted-average exercise price          |  | $18.94                   |  | $40.09          |  | $57.25         
|Options exercisable                      |  |                          |  |                 |  |                
|Shares exercisable                       |  | 512,938                  |  | 224,123         |  | 117,910        
|Weighted-average remaining life in years |  | 4.14                     |  | 3.89            |  | 8.21           
|Weighted-average exercise price          |  | $19.43                   |  | $38.33          |  | $57.97         



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Outstanding options expire on various dates to January 16, 2018. We have reserved
1,622,414 shares for future awards under the 2004 Plan as of February 29, 2008.

As of February 29, 2008, the
aggregate intrinsic value (the difference in the closing market price of our common stock of $57.60 and the exercise price to be paid by the optionee) of stock options outstanding was $28.7 million. The aggregate intrinsic value of exercisable stock
options at that date was $23.9 million. The total intrinsic value for options exercised (the difference in the market price of our common stock on the exercise date and the price paid by the optionee to exercise the option) was $2.8 million and $9.0
million for the three-month periods ended February 29, 2008 and February 28, 2007, respectively, and $4.6 million and $11.8 million for the nine-month periods ended February 29, 2008 and February 28, 2007, respectively.

We have provided additional stock-based compensation to employees and directors under stock appreciation rights contracts,
deferred compensation agreements, restricted stock payments and a former stock awards program. At February 29, 2008, outstanding stock appreciation rights totaled 158,645 shares, deferred compensation agreements to be settled in cash totaled
98,758 shares, deferred compensation agreements to be settled in common stock totaled 7,005 shares, unvested restricted stock payments totaled 18,667 shares and stock awards totaled 6,426 shares. Other credits included $10.7 million at
February 29, 2008 and $17.4 million at May 31, 2007 representing accrued stock-based compensation which is expected to be settled in cash.

Total stock-based compensation included in selling, general and administrative expense (credit) was $(1.4) million and $4.0 million in the three-month periods ended February 29, 2008 and February 28, 2007,
respectively, and $(2.7) million and $10.3 million in the nine-month periods ended February 29, 2008 and February 28, 2007, respectively. Credits are the result of the impact of changes in our companys stock price on stock-based
awards accounted for as liabilities.

As of February 29, 2008, $11.7 million of total unrecognized compensation cost
related to stock options, stock appreciation rights contracts, restricted stock payments and stock awards is expected to be recognized. We currently expect to recognize in the years succeeding February 29, 2008 approximately $4.2 million of
this stock-based compensation expense in 2009, $3.2 million in 2010, $2.3 million in 2011, $1.4 million in 2012, $500,000 in 2013 and thereafter an aggregate of $100,000.

RETIREMENT PLANS

Riverside Defined Benefit Plans.Approximately 600 employees and
retirees of our California cement subsidiary, Riverside Cement Company, are covered by a defined benefit pension plan and a postretirement health benefit plan. Unrecognized prior service costs and actuarial gains or losses for these plans are
recognized in a systematic manner over the remaining service periods of active employees expected to receive benefits under these plans. The amount of the defined benefit pension plan and postretirement health benefit plan expense charged to costs
and expenses for the three-month and nine-month periods ended February 29, 2008 and February 28, 2007, was as follows:



|                                   |  |   |                 |   |  |   |                |   |  |   |      |   |  |   |      |  
|---------------------------------- |  | - | --------------- | - |  | - | -------------- | - |  | - | ---- | - |  | - | ---- | -
|                                   |  |   | Pension Benefit |   |  |   | Health Benefit |  
|In thousands                       |  |   | 2008            |   |  |   | 2007           |   |  |   | 2008 |   |  |   | 2007 |  
|                                   |  |   |                 |  
|Three months ended February 29/28  |  |   |                 |   |  |   |                |   |  |   |      |   |  |   |      |  
|Service cost                       |  | $ | 144             |   |  | $ | 124            |   |  | $ | 31   |   |  | $ | 25   |  
|Interest cost                      |  |   | 695             |   |  |   | 681            |   |  |   | 100  |   |  |   | 92   |  
|Expected return on plan assets     |  |   | (882            | ) |  |   | (760           | ) |  |   | --   |   |  |   | --   |  
|Amortization of prior service cost |  |   | --              |   |  |   | --             |   |  |   | (212 | ) |  |   | (212 | )
|Amortization of net actuarial loss |  |   | 55              |   |  |   | 106            |   |  |   | 164  |   |  |   | 151  |  
|                                   |  |   |                 |   |  |   |                |   |  |   |      |   |  |   |      |  
|                                   |  | $ | 12              |   |  | $ | 151            |   |  | $ | 83   |   |  | $ | 56   |  
|                                   |  |   |                 |   |  |   |                |   |  |   |      |   |  |   |      |  
|                                   |  |   |                 |  
|Nine months ended February 29/28   |  |   |                 |   |  |   |                |   |  |   |      |   |  |   |      |  
|Service cost                       |  | $ | 432             |   |  | $ | 370            |   |  | $ | 91   |   |  | $ | 74   |  
|Interest cost                      |  |   | 2,085           |   |  |   | 2,043          |   |  |   | 299  |   |  |   | 276  |  
|Expected return on plan assets     |  |   | (2,645          | ) |  |   | (2,280         | ) |  |   | --   |   |  |   | --   |  
|Amortization of prior service cost |  |   | --              |   |  |   | --             |   |  |   | (634 | ) |  |   | (634 | )
|Amortization of net actuarial loss |  |   | 165             |   |  |   | 319            |   |  |   | 492  |   |  |   | 450  |  
|                                   |  |   |                 |   |  |   |                |   |  |   |      |   |  |   |      |  
|                                   |  | $ | 37              |   |  | $ | 452            |   |  | $ | 248  |   |  | $ | 166  |  
|                                   |  |   |                 |   |  |   |                |   |  |   |      |   |  |   |      |  



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Financial Security Defined Benefit Plans.We have a series of financial security
plans that are non-qualified defined benefit plans providing retirement and death benefits to substantially all of our executive and key managerial employees. The plans are contributory but not funded. The amount of financial security plan benefit
expense charged to costs and expenses for the three-month and nine-month periods ended February 29, 2008 and February 28, 2007, was as follows:



|                                  |  |             |       |   |  |   |       |  
|--------------------------------- |  | ----------- | ----- | - |  | - | ----- | -
|                                  |  | FSP Benefit |      
|In thousands                      |  |             | 2008  |   |  |   | 2007  |  
|                                  |  |            
|Three months ended February 29/28 |  |             |       |   |  |   |       |  
|Service cost                      |  | $           | 742   |   |  | $ | 571   |  
|Interest cost                     |  |             | 474   |   |  |   | 440   |  
|Recognized actuarial loss         |  |             | --    |   |  |   | --    |  
|Participant contributions         |  |             | (87   | ) |  |   | (84   | )
|                                  |  |             |       |   |  |   |       |  
|                                  |  | $           | 1,129 |   |  | $ | 927   |  
|                                  |  |             |       |   |  |   |       |  
|Nine months ended February 29/28  |  |             |       |   |  |   |       |  
|Service cost                      |  | $           | 2,228 |   |  | $ | 1,714 |  
|Interest cost                     |  |             | 1,422 |   |  |   | 1,321 |  
|Recognized actuarial loss         |  |             | --    |   |  |   | 254   |  
|Participant contributions         |  |             | (284  | ) |  |   | (245  | )
|                                  |  |             |       |   |  |   |       |  
|                                  |  | $           | 3,366 |   |  | $ | 3,044 |  
|                                  |  |             |       |   |  |   |       |  

INCOME TAXES

Federal income taxes for the interim periods ended February 29, 2008 and February 28, 2007 have been included in the accompanying financial statements on the basis of an estimated
annual rate. The primary reason that the tax rate differs from the 35% statutory corporate rate is due to percentage depletion that is tax deductible, state income taxes and deductions for income from qualified domestic production activities. Our
estimated effective tax rate for 2008 is 31.1% compared to 32.1% for 2007. We made income tax payments of $26.8 million and $25.8 million during the nine-month periods ended February 29, 2008 and February 28, 2007. We received income tax
refunds of $600,000 during each of the nine-month periods ended February 29, 2008 and February 28, 2007.

Effective June 1, 2007, we adopted Financial Accounting Standards Board Interpretation 48, Accounting for Uncertainty in Income Taxes. This interpretation clarifies the accounting for uncertainty in income taxes recognized
in an enterprises financial statements in accordance with SFAS No. 109, Accounting for Income Taxes and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a
tax position taken or expected to be taken in a tax return. It also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. We have no significant reserves for uncertain
tax positions and no adjustments to such reserves were required upon adoption of this interpretation. Interest and penalties resulting from audits by tax authorities have been immaterial and are included in income tax expense in the consolidated
statements of operations.

In addition to our federal income tax return, we file income tax returns in various state
jurisdictions. We are no longer subject to federal or state income tax examinations by tax authorities for years prior to 2004. Our federal income tax returns for 2004 through 2006 are currently under examination. We do not anticipate that any
adjustments would have a material effect on our financial position.



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LEGAL PROCEEDINGS AND CONTINGENT LIABILITIES

We are subject to federal, state and local environmental laws, regulations and permits concerning, among other matters, air emissions and
wastewater discharge. We intend to comply with these laws, regulations and permits. However, from time to time we receive claims from federal and state environmental regulatory agencies and entities asserting that we are or may be in violation of
certain of these laws, regulations and permits, or from private parties alleging that our operations have injured them or their property. Based on our experience and the information currently available to us, we believe that such claims will not
have a material impact on our financial condition or results of operations. Despite our compliance and experience, it is possible that we could be held liable for future charges which might be material but are not currently known or estimable. In
addition, changes in federal or state laws, regulations or requirements or discovery of currently unknown conditions could require additional expenditures by us.

We are defendants in lawsuits which arose in the normal course of business. In managements judgment the ultimate liability, if any, from such legal proceedings will not have a material
effect on our consolidated financial position or results of operations.

BUSINESS SEGMENTS

We have three business segments: cement, aggregates and consumer products. Our business segments are managed separately along product
lines. Through the cement segment we produce and sell gray portland cement as our principal product, as well as specialty cements. Through the aggregates segment we produce and sell stone, sand and gravel as our principal products, as well as
expanded shale and clay aggregates. Through the consumer products segment we produce and sell ready-mix concrete as our principal product, as well as packaged concrete and related products. We account for intersegment sales at market prices. Segment
operating profit consists of net sales less operating costs and expenses, including certain operating overhead and other income items not allocated to a specific segment. Corporate includes those administrative, financial, legal, environmental,
human resources and real estate activities which are not allocated to operations and are excluded from segment operating profit. Identifiable assets by segment are those assets that are used in each segments operation. Corporate assets consist
primarily of cash and cash equivalents, real estate and other financial assets not identified with a business segment.



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The following is a summary of operating results and certain other financial data for our
business segments.



|                                               |  |                    |   |  |                   |   |  |              |   |  |              |  
|---------------------------------------------- |  | ------------------ | - |  | ----------------- | - |  | ------------ | - |  | ------------ | -
|                                               |  | Three months ended |   |  | Nine months ended |  
|                                               |  | February 29,       |   |  | February 28,      |   |  | February 29, |   |  | February 28, |  
|In thousands                                   |  | 2008               |   |  | 2007              |   |  | 2008         |   |  | 2007         |  
|                                               |  |                    |   | 
|Net sales                                      |  |                    |   |  |                   |   |  |              |   |  |              |  
|Cement                                         |  |                    |   |  |                   |   |  |              |   |  |              |  
|Sales to external customers                    |  | $  92,235          |   |  | $  95,994         |   |  | $309,031     |   |  | $314,501     |  
|Intersegment sales                             |  | 18,562             |   |  | 15,891            |   |  | 60,497       |   |  | 57,844       |  
|Aggregates                                     |  |                    |   |  |                   |   |  |              |   |  |              |  
|Sales to external customers                    |  | 57,119             |   |  | 53,341            |   |  | 181,655      |   |  | 177,656      |  
|Intersegment sales                             |  | 11,047             |   |  | 7,232             |   |  | 34,332       |   |  | 24,691       |  
|Consumer products                              |  |                    |   |  |                   |   |  |              |   |  |              |  
|Sales to external customers                    |  | 81,181             |   |  | 67,436            |   |  | 271,776      |   |  | 242,098      |  
|Intersegment sales                             |  | 879                |   |  | 767               |   |  | 2,841        |   |  | 2,879        |  
|Eliminations                                   |  | (30,488            | ) |  | (23,890           | ) |  | (97,670      | ) |  | (85,414      | )
|                                               |  |                    |   |  |                   |   |  |              |   |  |              |  
|Total net sales                                |  | $230,535           |   |  | $216,771          |   |  | $762,462     |   |  | $734,255     |  
|                                               |  |                    |   |  |                   |   |  |              |   |  |              |  
|                                               |  |                    |   | 
|Segment operating profit                       |  |                    |   |  |                   |   |  |              |   |  |              |  
|Cement                                         |  | $  24,299          |   |  | $  36,470         |   |  | $  75,467    |   |  | $126,950     |  
|Aggregates                                     |  | 5,304              |   |  | 1,320             |   |  | 28,049       |   |  | 20,734       |  
|Consumer products                              |  | (481               | ) |  | (1,742            | ) |  | 8,203        |   |  | 4,522        |  
|Unallocated overhead and other income  net    |  | (2,624             | ) |  | (3,257            | ) |  | (6,104       | ) |  | (8,045       | )
|                                               |  |                    |   |  |                   |   |  |              |   |  |              |  
|Total segment operating profit                 |  | 26,498             |   |  | 32,791            |   |  | 105,615      |   |  | 144,161      |  
|                                               |  |                    |   | 
|Corporate                                      |  |                    |   |  |                   |   |  |              |   |  |              |  
|Selling, general and administrative expense    |  | (6,119             | ) |  | (11,359           | ) |  | (19,307      | ) |  | (33,628      | )
|Interest                                       |  | --                 |   |  | (3,289            | ) |  | --           |   |  | (13,474      | )
|Other income                                   |  | 545                |   |  | 1,408             |   |  | 3,283        |   |  | 7,542        |  
|                                               |  |                    |   |  |                   |   |  |              |   |  |              |  
|Income before income taxes                     |  | $  20,924          |   |  | $  19,551         |   |  | $  89,591    |   |  | $104,601     |  
|                                               |  |                    |   |  |                   |   |  |              |   |  |              |  
|                                               |  |                    |   | 
|Depreciation, depletion and amortization       |  |                    |   |  |                   |   |  |              |   |  |              |  
|Cement                                         |  | $    6,222         |   |  | $    5,893        |   |  | $  18,128    |   |  | $  17,279    |  
|Aggregates                                     |  | 5,367              |   |  | 3,942             |   |  | 15,915       |   |  | 11,467       |  
|Consumer products                              |  | 2,061              |   |  | 1,607             |   |  | 6,347        |   |  | 4,749        |  
|Corporate                                      |  | 166                |   |  | 130               |   |  | 590          |   |  | 361          |  
|                                               |  |                    |   |  |                   |   |  |              |   |  |              |  
|Total depreciation, depletion and amortization |  | $  13,816          |   |  | $  11,572         |   |  | $  40,980    |   |  | $  33,856    |  
|                                               |  |                    |   |  |                   |   |  |              |   |  |              |  
|                                               |  |                    |   | 
|Capital expenditures                           |  |                    |   |  |                   |   |  |              |   |  |              |  
|Cement                                         |  | $  59,104          |   |  | $  70,224         |   |  | $207,176     |   |  | $186,613     |  
|Aggregates                                     |  | 4,174              |   |  | 16,601            |   |  | 22,662       |   |  | 40,689       |  
|Consumer products                              |  | 2,937              |   |  | 1,686             |   |  | 10,732       |   |  | 7,431        |  
|Corporate                                      |  | 377                |   |  | 472               |   |  | 1,110        |   |  | 1,706        |  
|                                               |  |                    |   |  |                   |   |  |              |   |  |              |  
|Total capital expenditures                     |  | $  66,592          |   |  | $  88,983         |   |  | $241,680     |   |  | $236,439     |  
|                                               |  |                    |   |  |                   |   |  |              |   |  |              |  
|                                               |  |                    |   | 
|Net sales by product                           |  |                    |   |  |                   |   |  |              |   |  |              |  
|Cement                                         |  | $  85,330          |   |  | $  91,252         |   |  | $289,403     |   |  | $297,984     |  
|Stone, sand and gravel                         |  | 29,128             |   |  | 26,749            |   |  | 94,222       |   |  | 92,506       |  
|Ready-mix concrete                             |  | 69,560             |   |  | 56,946            |   |  | 233,597      |   |  | 202,301      |  
|Other products                                 |  | 26,938             |   |  | 24,404            |   |  | 83,462       |   |  | 82,763       |  
|Delivery fees                                  |  | 19,579             |   |  | 17,420            |   |  | 61,778       |   |  | 58,701       |  
|                                               |  |                    |   |  |                   |   |  |              |   |  |              |  
|Total net sales                                |  | $230,535           |   |  | $216,771          |   |  | $762,462     |   |  | $734,255     |  
|                                               |  |                    |   |  |                   |   |  |              |   |  |              |  



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All sales were made in the United States during the periods presented with no single
customer representing more than 10 percent of sales.

Cement segment operating profit for the three-month and nine-month
periods ended February 28, 2007 includes $19.8 million representing distributions which we received pursuant to agreements that settled a 16-year dispute over the U.S. antidumping duty order on cement imports from Mexico.

Cement capital expenditures include $154.4 million and $170.2 million in the nine-month periods ended February 29, 2008 and
February 28, 2007, respectively, incurred in connection with the expansion and modernization of our Oro Grande, California cement plant. In addition, cement capital expenditures include $38.8 million and $4.8 million in the nine-month periods
ended February 29, 2008 and February 28, 2007, respectively, incurred in connection with the expansion of our Hunter, Texas cement plant. Other capital expenditures incurred represent normal replacement and technological upgrades of
existing equipment and acquisitions to sustain existing operations in each segment.

The following is a summary of assets
used in each of our business segments.



|                    |  |              |  |            
|------------------- |  | ------------ |  | -----------
|                    |  | February 29, |  | May 31,    
|In thousands        |  | 2008         |  | 2007       
|                    |  |             
|Identifiable assets |  |              |  |            
|Cement              |  | $   943,880  |  | $   775,229
|Aggregates          |  | 218,085      |  | 209,614    
|Consumer products   |  | 112,756      |  | 102,916    
|Corporate           |  | 87,299       |  | 174,477    
|                    |  |              |  |            
|Total assets        |  | $1,362,020   |  | $1,262,236 
|                    |  |              |  |            

All of our identifiable assets are located in the United States.

CONDENSED CONSOLIDATING FINANCIAL INFORMATION

On July 6, 2005, Texas Industries, Inc. (the parent company) issued $250 million principal amount of its 7.25% Senior Notes. All existing consolidated subsidiaries of the parent company are 100% owned and provide
a joint and several, full and unconditional guarantee of the securities. There are no significant restrictions on the parent companys ability to obtain funds from any of the guarantor subsidiaries in the form of a dividend or loan.
Additionally, there are no significant restrictions on a guarantor subsidiarys ability to obtain funds from the parent company or its direct or indirect subsidiaries.

The following condensed consolidating balance sheets, statements of operations and statements of cash flows are provided for the parent company, all guarantor subsidiaries and all non-guarantor
subsidiaries. The information has been presented as if the parent company accounted for its ownership of the guarantor and non-guarantor subsidiaries using the equity method of accounting.



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|                                                           |  |                        |  |                        |  |                             |  |                     |   |  |              
|---------------------------------------------------------- |  | ---------------------- |  | ---------------------- |  | --------------------------- |  | ------------------- | - |  | -------------
|In thousands                                               |  | Texas Industries, Inc. |  | Guarantor Subsidiaries |  | Non- Guarantor Subsidiaries |  | Eliminating Entries |   |  | Consolidated 
|                                                           |  |                       
|Condensed consolidating balance sheet at February 29, 2008 |  |                        |  |                        | 
|                                                           |  |                        |  |                        | 
|Cash and cash equivalents                                  |  | $       5,535          |  | $       4,097          |  | $--                         |  | $             --    |   |  | $       9,632
|Receivables - net                                          |  |                       |  | 151,708                |  | --                          |  | --                  |   |  | 151,708      
|Intercompany receivables                                   |  | 186,005                |  | 18,762                 |  | --                          |  | (204,767            | ) |  | --           
|Inventories                                                |  | --                     |  | 123,735                |  | --                          |  | --                  |   |  | 123,735      
|Deferred income taxes and prepaid expenses                 |  | 10,068                 |  | 12,414                 |  | --                          |  | --                  |   |  | 22,482       
|                                                           |  |                        |  |                        |  |                             |  |                     |   |  |              
|Total current assets                                       |  | 201,608                |  | 310,716                |  | --                          |  | (204,767            | ) |  | 307,557      
|Goodwill                                                   |  | --                     |  | 60,110                 |  | --                          |  | --                  |   |  | 60,110       
|Real estate and investments                                |  | 17,780                 |  | 6,054                  |  | --                          |  | --                  |   |  | 23,834       
|Deferred charges and intangibles                           |  | 6,803                  |  | 4,573                  |  | --                          |  | --                  |   |  | 11,376       
|Investment in subsidiaries                                 |  | 891,792                |  | --                     |  | --                          |  | (891,792            | ) |  | --           
|Long-term intercompany receivables                         |  | 50,000                 |  | --                     |  | --                          |  | (50,000             | ) |  | --           
|Property, plant and equipment  net                        |  | --                     |  | 959,143                |  | --                          |  | --                  |   |  | 959,143      
|                                                           |  |                        |  |                        |  |                             |  |                     |   |  |              
|Total assets                                               |  | $1,167,983             |  | $1,340,596             |  | $--                         |  | $(1,146,559         | ) |  | $1,362,020   
|                                                           |  |                        |  |                        |  |                             |  |                     |   |  |              
|Accounts payable                                           |  | $            34        |  | $     89,861           |  | $--                         |  | $             --    |   |  | $     89,895 
|Intercompany payables                                      |  | 18,762                 |  | 186,005                |  | --                          |  | (204,767            | ) |  | --           
|Accrued interest, wages and other items                    |  | 6,472                  |  | 36,282                 |  | --                          |  | --                  |   |  | 42,754       
|Current portion of long-term debt                          |  | --                     |  | 221                    |  | --                          |  | --                  |   |  | 221          
|                                                           |  |                        |  |                        |  |                             |  |                     |   |  |              
|Total current liabilities                                  |  | 25,268                 |  | 312,369                |  | --                          |  | (204,767            | ) |  | 132,870      
|Long-term debt                                             |  | 335,322                |  | 9,116                  |  | --                          |  | --                  |   |  | 344,438      
|Long-term intercompany payables                            |  | --                     |  | 50,000                 |  | --                          |  | (50,000             | ) |  | --           
|Deferred income taxes and other credits                    |  | 12,955                 |  | 77,319                 |  | --                          |  | --                  |   |  | 90,274       
|Shareholders equity                                       |  | 794,438                |  | 891,792                |  | --                          |  | (891,792            | ) |  | 794,438      
|                                                           |  |                        |  |                        |  |                             |  |                     |   |  |              
|Total liabilities and shareholders equity                 |  | $1,167,983             |  | $1,340,596             |  | $--                         |  | $(1,146,559         | ) |  | $1,362,020   
|                                                           |  |                        |  |                        |  |                             |  |                     |   |  |              
|                                                           | 
|Condensed consolidating balance sheet at May 31, 2007      |  |                        | 
|                                                           |  |                        |  |                        | 
|Cash and cash equivalents                                  |  | $       6,095          |  | $       9,043          |  | $--                         |  | $             --    |   |  | $     15,138 
|Receivables - net                                          |  | --                     |  | 142,610                |  | --                          |  | --                  |   |  | 142,610      
|Intercompany receivables                                   |  | 50,296                 |  | 18,761                 |  | --                          |  | (69,057             | ) |  | --           
|Inventories                                                |  | --                     |  | 121,467                |  | --                          |  | --                  |   |  | 121,467      
|Deferred income taxes and prepaid expenses                 |  | 3,277                  |  | 14,344                 |  | --                          |  | --                  |   |  | 17,621       
|                                                           |  |                        |  |                        |  |                             |  |                     |   |  |              
|Total current assets                                       |  | 59,668                 |  | 306,225                |  | --                          |  | (69,057             | ) |  | 296,836      
|Goodwill                                                   |  | --                     |  | 58,395                 |  | --                          |  | --                  |   |  | 58,395       
|Real estate and investments                                |  | 104,980                |  | 6,434                  |  | --                          |  | --                  |   |  | 111,414      
|Deferred charges and intangibles                           |  | 7,180                  |  | 4,189                  |  | --                          |  | --                  |   |  | 11,369       
|Investment in subsidiaries                                 |  | 816,831                |  | --                     |  | --                          |  | (816,831            | ) |  | --           
|Long-term intercompany receivables                         |  | 50,000                 |  | --                     |  | --                          |  | (50,000             | ) |  | --           
|Property, plant and equipment  net                        |  | --                     |  | 784,222                |  | --                          |  | --                  |   |  | 784,222      
|                                                           |  |                        |  |                        |  |                             |  |                     |   |  |              
|Total assets                                               |  | $1,038,659             |  | $1,159,465             |  | $--                         |  | $   (935,888        | ) |  | $1,262,236   
|                                                           |  |                        |  |                        |  |                             |  |                     |   |  |              
|Accounts payable                                           |  | $            77        |  | $   109,672            |  | $--                         |  | $             --    |   |  | $   109,749  
|Intercompany payables                                      |  | 18,761                 |  | 50,296                 |  | --                          |  | (69,057             | ) |  | --           
|Accrued interest, wages and other items                    |  | 10,457                 |  | 47,434                 |  | --                          |  | --                  |   |  | 57,891       
|Current portion of long-term debt                          |  | 1,135                  |  | 205                    |  | --                          |  | --                  |   |  | 1,340        
|                                                           |  |                        |  |                        |  |                             |  |                     |   |  |              
|Total current liabilities                                  |  | 30,430                 |  | 207,607                |  | --                          |  | (69,057             | ) |  | 168,980      
|Long-term debt                                             |  | 265,354                |  | 9,062                  |  | --                          |  | --                  |   |  | 274,416      
|Long-term intercompany payables                            |  | --                     |  | 50,000                 |  | --                          |  | (50,000             | ) |  | --           
|Deferred income taxes and other credits                    |  | 14,393                 |  | 75,965                 |  | --                          |  | --                  |   |  | 90,358       
|Shareholders equity                                       |  | 728,482                |  | 816,831                |  | --                          |  | (816,831            | ) |  | 728,482      
|                                                           |  |                        |  |                        |  |                             |  |                     |   |  |              
|Total liabilities and shareholders equity                 |  | $1,038,659             |  | $1,159,465             |  | $--                         |  | $   (935,888        | ) |  | $1,262,236   
|                                                           |  |                        |  |                        |  |                             |  |                     |   |  |              



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|                                                                                             |  |                        |   |  |                        |   |  |                             |  |                     |   |  |              |  
|-------------------------------------------------------------------------------------------- |  | ---------------------- | - |  | ---------------------- | - |  | --------------------------- |  | ------------------- | - |  | ------------ | -
|In thousands                                                                                 |  | Texas Industries, Inc. |   |  | Guarantor Subsidiaries |   |  | Non- Guarantor Subsidiaries |  | Eliminating Entries |   |  | Consolidated |  
|                                                                                            
|Condensed consolidating statement of operations for the three months ended February 29,
2008 | 
|                                                                                             |  |                        |   |  |                       
|Net sales                                                                                    |  | $       --             |   |  | $230,535               |   |  | $--                         |  | $        --         |   |  | $230,535     |  
|Cost of products sold                                                                        |  | --                     |   |  | 190,980                |   |  | --                          |  | --                  |   |  | 190,980      |  
|                                                                                             |  |                        |   |  |                        |   |  |                             |  |                     |   |  |              |  
|Gross profit                                                                                 |  | --                     |   |  | 39,555                 |   |  | --                          |  | --                  |   |  | 39,555       |  
|                                                                                             |  |                        |   |  |                       
|Selling, general and administrative                                                          |  | 1,239                  |   |  | 19,478                 |   |  | --                          |  | --                  |   |  | 20,717       |  
|Interest                                                                                     |  | 7,301                  |   |  | --                     |   |  | --                          |  | (7,301              | ) |  | --           |  
|Other income                                                                                 |  | (163                   | ) |  | (1,923                 | ) |  | --                          |  | --                  |   |  | (2,086       | )
|Intercompany other income                                                                    |  | (863                   | ) |  | (6,438                 | ) |  | --                          |  | 7,301               |   |  | --           |  
|                                                                                             |  |                        |   |  |                        |   |  |                             |  |                     |   |  |              |  
|                                                                                             |  | 7,514                  |   |  | 11,117                 |   |  | --                          |  | --                  |   |  | 18,631       |  
|                                                                                             |  |                        |   |  |                        |   |  |                             |  |                     |   |  |              |  
|Income before the following items                                                            |  | (7,514                 | ) |  | 28,438                 |   |  | --                          |  | --                  |   |  | 20,924       |  
|Income taxes                                                                                 |  | (2,609                 | ) |  | 8,909                  |   |  | --                          |  | --                  |   |  | 6,300        |  
|                                                                                             |  |                        |   |  |                        |   |  |                             |  |                     |   |  |              |  
|                                                                                             |  | (4,905                 | ) |  | 19,529                 |   |  | --                          |  | --                  |   |  | 14,624       |  
|Equity in earnings of subsidiaries                                                           |  | 19,529                 |   |  | --                     |   |  | --                          |  | (19,529             | ) |  | --           |  
|                                                                                             |  |                        |   |  |                        |   |  |                             |  |                     |   |  |              |  
|Net income                                                                                   |  | $14,624                |   |  | $  19,529              |   |  | $--                         |  | $(19,529            | ) |  | $  14,624    |  
|                                                                                             |  |                        |   |  |                        |   |  |                             |  |                     |   |  |              |  
|                                                                                            
|Condensed consolidating statement of operations for the three months ended February 28,
2007 | 
|                                                                                             |  |                        |   |  |                       
|Net sales                                                                                    |  | $       --             |   |  | $216,771               |   |  | $--                         |  | $        --         |   |  | $216,771     |  
|Cost of products sold                                                                        |  | --                     |   |  | 169,702                |   |  | --                          |  | --                  |   |  | 169,702      |  
|                                                                                             |  |                        |   |  |                        |   |  |                             |  |                     |   |  |              |  
|Gross profit                                                                                 |  | --                     |   |  | 47,069                 |   |  | --                          |  | --                  |   |  | 47,069       |  
|                                                                                             |  |                        |   |  |                       
|Selling, general and administrative                                                          |  | 3,258                  |   |  | 24,218                 |   |  | --                          |  | --                  |   |  | 27,476       |  
|Interest                                                                                     |  | 4,138                  |   |  | 14                     |   |  | --                          |  | (863                | ) |  | 3,289        |  
|Other income                                                                                 |  | (792                   | ) |  | (2,455                 | ) |  | --                          |  | --                  |   |  | (3,247       | )
|Intercompany other income                                                                    |  | (863                   | ) |  | --                     |   |  | --                          |  | 863                 |   |  | --           |  
|                                                                                             |  |                        |   |  |                        |   |  |                             |  |                     |   |  |              |  
|                                                                                             |  | 5,741                  |   |  | 21,777                 |   |  | --                          |  | --                  |   |  | 27,518       |  
|                                                                                             |  |                        |   |  |                        |   |  |                             |  |                     |   |  |              |  
|Income before the following items                                                            |  | (5,741                 | ) |  | 25,292                 |   |  | --                          |  | --                  |   |  | 19,551       |  
|Income taxes                                                                                 |  | (1,956                 | ) |  | 8,794                  |   |  | --                          |  | --                  |   |  | 6,838        |  
|                                                                                             |  |                        |   |  |                        |   |  |                             |  |                     |   |  |              |  
|                                                                                             |  | (3,785                 | ) |  | 16,498                 |   |  | --                          |  | --                  |   |  | 12,713       |  
|Equity in earnings of subsidiaries                                                           |  | 16,498                 |   |  | --                     |   |  | --                          |  | (16,498             | ) |  | --           |  
|                                                                                             |  |                        |   |  |                        |   |  |                             |  |                     |   |  |              |  
|Net income                                                                                   |  | $12,713                |   |  | $  16,498              |   |  | $--                         |  | $(16,498            | ) |  | $  12,713    |  
|                                                                                             |  |                        |   |  |                        |   |  |                             |  |                     |   |  |              |  



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|                                                                                            |  |                        |   |  |                        |   |  |                             |  |                     |   |  |              |  
|------------------------------------------------------------------------------------------- |  | ---------------------- | - |  | ---------------------- | - |  | --------------------------- |  | ------------------- | - |  | ------------ | -
|In thousands                                                                                |  | Texas Industries, Inc. |   |  | Guarantor Subsidiaries |   |  | Non- Guarantor Subsidiaries |  | Eliminating Entries |   |  | Consolidated |  
|                                                                                           
|Condensed consolidating statement of operations for the nine months ended February 29,
2008 | 
|                                                                                            |  |                        |   |  |                       
|Net sales                                                                                   |  | $        --            |   |  | $762,462               |   |  | $--                         |  | $        --         |   |  | $762,462     |  
|Cost of products sold                                                                       |  | --                     |   |  | 616,688                |   |  | --                          |  | --                  |   |  | 616,688      |  
|                                                                                            |  |                        |   |  |                        |   |  |                             |  |                     |   |  |              |  
|Gross profit                                                                                |  | --                     |   |  | 145,774                |   |  | --                          |  | --                  |   |  | 145,774      |  
|                                                                                            |  |                        |   |  |                       
|Selling, general and administrative                                                         |  | 3,200                  |   |  | 60,764                 |   |  | --                          |  | --                  |   |  | 63,964       |  
|Interest                                                                                    |  | 20,142                 |   |  | --                     |   |  | --                          |  | (20,142             | ) |  | --           |  
|Other income                                                                                |  | (329                   | ) |  | (7,452                 | ) |  | --                          |  | --                  |   |  | (7,781       | )
|Intercompany other income                                                                   |  | (2,618                 | ) |  | (17,524                | ) |  | --                          |  | 20,142              |   |  | --           |  
|                                                                                            |  |                        |   |  |                        |   |  |                             |  |                     |   |  |              |  
|                                                                                            |  | 20,395                 |   |  | 35,788                 |   |  | --                          |  | --                  |   |  | 56,183       |  
|                                                                                            |  |                        |   |  |                        |   |  |                             |  |                     |   |  |              |  
|Income before the following items                                                           |  | (20,395                | ) |  | 109,986                |   |  | --                          |  | --                  |   |  | 89,591       |  
|Income taxes                                                                                |  | (7,303                 | ) |  | 35,041                 |   |  | --                          |  | --                  |   |  | 27,738       |  
|                                                                                            |  |                        |   |  |                        |   |  |                             |  |                     |   |  |              |  
|                                                                                            |  | (13,092                | ) |  | 74,945                 |   |  | --                          |  | --                  |   |  | 61,853       |  
|Equity in earnings of subsidiaries                                                          |  | 74,945                 |   |  | --                     |   |  | --                          |  | (74,945             | ) |  | --           |  
|                                                                                            |  |                        |   |  |                        |   |  |                             |  |                     |   |  |              |  
|Net income                                                                                  |  | $ 61,853               |   |  | $  74,945              |   |  | $--                         |  | $(74,945            | ) |  | $  61,853    |  
|                                                                                            |  |                        |   |  |                        |   |  |                             |  |                     |   |  |              |  
|                                                                                           
|Condensed consolidating statement of operations for the nine months ended February 28,
2007 | 
|                                                                                            |  |                        |   |  |                       
|Net sales                                                                                   |  | $        --            |   |  | $734,255               |   |  | $--                         |  | $        --         |   |  | $734,255     |  
|Cost of products sold                                                                       |  | --                     |   |  | 569,097                |   |  | --                          |  | --                  |   |  | 569,097      |  
|                                                                                            |  |                        |   |  |                        |   |  |                             |  |                     |   |  |              |  
|Gross profit                                                                                |  | --                     |   |  | 165,158                |   |  | --                          |  | --                  |   |  | 165,158      |  
|                                                                                            |  |                        |   |  |                       
|Selling, general and administrative                                                         |  | 8,800                  |   |  | 69,881                 |   |  | --                          |  | --                  |   |  | 78,681       |  
|Interest                                                                                    |  | 16,052                 |   |  | 40                     |   |  | --                          |  | (2,618              | ) |  | 13,474       |  
|Other income                                                                                |  | (3,960                 | ) |  | (27,638                | ) |  | --                          |  | --                  |   |  | (31,598      | )
|Intercompany other income                                                                   |  | (2,618                 | ) |  | --                     |   |  | --                          |  | 2,618               |   |  | --           |  
|                                                                                            |  |                        |   |  |                        |   |  |                             |  |                     |   |  |              |  
|                                                                                            |  | 18,274                 |   |  | 42,283                 |   |  | --                          |  | --                  |   |  | 60,557       |  
|                                                                                            |  |                        |   |  |                        |   |  |                             |  |                     |   |  |              |  
|Income before the following items                                                           |  | (18,274                | ) |  | 122,875                |   |  | --                          |  | --                  |   |  | 104,601      |  
|Income taxes                                                                                |  | (6,652                 | ) |  | 40,457                 |   |  | --                          |  | --                  |   |  | 33,805       |  
|                                                                                            |  |                        |   |  |                        |   |  |                             |  |                     |   |  |              |  
|                                                                                            |  | (11,622                | ) |  | 82,418                 |   |  | --                          |  | --                  |   |  | 70,796       |  
|Equity in earnings of subsidiaries                                                          |  | 82,418                 |   |  | --                     |   |  | --                          |  | (82,418             | ) |  | --           |  
|                                                                                            |  |                        |   |  |                        |   |  |                             |  |                     |   |  |              |  
|Net income                                                                                  |  | $ 70,796               |   |  | $  82,418              |   |  | $--                         |  | $(82,418            | ) |  | $  70,796    |  
|                                                                                            |  |                        |   |  |                        |   |  |                             |  |                     |   |  |              |  



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|                                                                                            |  |                        |   |  |                        |   |  |                             |  |                     |  |              |  
|------------------------------------------------------------------------------------------- |  | ---------------------- | - |  | ---------------------- | - |  | --------------------------- |  | ------------------- |  | ------------ | -
|In thousands                                                                                |  | Texas Industries, Inc. |   |  | Guarantor Subsidiaries |   |  | Non- Guarantor Subsidiaries |  | Eliminating Entries |  | Consolidated |  
|                                                                                           
|Condensed consolidating statement of cash flows for the nine months ended February 29,
2008 | 
|                                                                                            |  |                        |   |  |                       
|Net cash provided by operating activities                                                   |  | $(156,414              | ) |  | $ 232,731              |   |  | $--                         |  | $--                 |  | $   76,317   |  
|                                                                                            |  |                        |   |  |                       
|Investing activities                                                                        |  |                        |   |  |                        |   |  |                             |  |                     |  |              |  
|Capital expenditures - expansions                                                           |  | --                     |   |  | (193,160               | ) |  | --                          |  | --                  |  | (193,160     | )
|Capital expenditures - other                                                                |  | --                     |   |  | (48,520                | ) |  | --                          |  | --                  |  | (48,520      | )
|Proceeds from asset disposals                                                               |  | --                     |   |  | 3,928                  |   |  | --                          |  | --                  |  | 3,928        |  
|Purchases of short-term investments                                                         |  | --                     |   |  | --                     |   |  | --                          |  | --                  |  | --           |  
|Sales of short-term investments                                                             |  | --                     |   |  | --                     |   |  | --                          |  | --                  |  | --           |  
|Investments in life insurance contracts                                                     |  | 88,140                 |   |  | --                     |   |  | --                          |  | --                  |  | 88,140       |  
|Other - net                                                                                 |  | --                     |   |  | 218                    |   |  | --                          |  | --                  |  | 218          |  
|                                                                                            |  |                        |   |  |                        |   |  |                             |  |                     |  |              |  
|Net cash used by investing activities                                                       |  | 88,140                 |   |  | (237,534               | ) |  | --                          |  | --                  |  | (149,394     | )
|                                                                                            |  |                        |   |  |                       
|Financing activities                                                                        |  |                        |   |  |                        |   |  |                             |  |                     |  |              |  
|Long-term borrowings                                                                        |  | 213,000                |   |  | --                     |   |  | --                          |  | --                  |  | 213,000      |  
|Debt retirements                                                                            |  | (144,170               |   |  | (143                   | ) |  | --                          |  | --                  |  | (144,313     | )
|Debt issuance and retirement costs                                                          |  | (1,152                 | ) |  | --                     |   |  | --                          |  | --                  |  | (1,152       | )
|Stock option exercises                                                                      |  | 2,678                  |   |  | --                     |   |  | --                          |  | --                  |  | 2,678        |  
|Excess tax benefits from stock-basedcompensation                                            |  | 3,519                  |   |  | --                     |   |  | --                          |  | --                  |  | 3,519        |  
|Common dividends paid                                                                       |  | (6,161                 | ) |  | --                     |   |  | --                          |  | --                  |  | (6,161       | )
|                                                                                            |  |                        |   |  |                        |   |  |                             |  |                     |  |              |  
|Net cash provided by financing activities                                                   |  | 67,714                 |   |  | (143                   | ) |  | --                          |  | --                  |  | 67,571       |  
|                                                                                            |  |                        |   |  |                        |   |  |                             |  |                     |  |              |  
|Decrease in cash and cash equivalents                                                       |  | (560                   | ) |  | (4,946                 | ) |  | --                          |  | --                  |  | (5,506       | )
|Cash and cash equivalents at beginning of period                                            |  | 6,095                  |   |  | 9,043                  |   |  | --                          |  | --                  |  | 15,138       |  
|                                                                                            |  |                        |   |  |                        |   |  |                             |  |                     |  |              |  
|Cash and cash equivalents at end of period                                                  |  | $     5,535            |   |  | $     4,097            |   |  | $--                         |  | $--                 |  | $     9,632  |  
|                                                                                            |  |                        |   |  |                        |   |  |                             |  |                     |  |              |  
|                                                                                           
|Condensed consolidating statement of cash flows for the nine months ended February 28,
2007 | 
|                                                                                            |  |                        |   |  |                       
|Net cash provided by operating activities                                                   |  | $(108,829              | ) |  | $ 234,580              |   |  | $--                         |  | $--                 |  | $ 125,751    |  
|                                                                                            |  |                        |   |  |                       
|Investing activities                                                                        |  |                        |   |  |                        |   |  |                             |  |                     |  |              |  
|Capital expenditures - expansions                                                           |  | --                     |   |  | (175,000               | ) |  | --                          |  | --                  |  | (175,000     | )
|Capital expenditures - other                                                                |  | --                     |   |  | (61,439                | ) |  | --                          |  | --                  |  | (61,439      | )
|Proceeds from asset disposals                                                               |  | --                     |   |  | 961                    |   |  | --                          |  | --                  |  | 961          |  
|Purchases of short-term investments                                                         |  | (8,500                 | ) |  | --                     |   |  | --                          |  | --                  |  | (8,500       | )
|Sales of short-term investments                                                             |  | 59,000                 |   |  | --                     |   |  | --                          |  | --                  |  | 59,000       |  
|Investments in life insurance contracts                                                     |  | (5,288                 | ) |  | --                     |   |  | --                          |  | --                  |  | (5,288       | )
|Other - net                                                                                 |  | --                     |   |  | (125                   | ) |  | --                          |  | --                  |  | (125         | )
|                                                                                            |  |                        |   |  |                        |   |  |                             |  |                     |  |              |  
|Net cash used by investing activities                                                       |  | 45,212                 |   |  | (235,603               | ) |  | --                          |  | --                  |  | (190,391     | )
|                                                                                            |  |                        |   |  |                       
|Financing activities                                                                        |  |                        |   |  |                        |   |  |                             |  |                     |  |              |  
|Long-term borrowings                                                                        |  | --                     |   |  | --                     |   |  | --                          |  | --                  |  | --           |  
|Debt retirements                                                                            |  | (1,285                 | ) |  | --                     |   |  | --                          |  | --                  |  | (1,285       | )
|Debt issuance and retirement costs                                                          |  | (4                     | ) |  | --                     |   |  | --                          |  | --                  |  | (4           | )
|Stock option exercises                                                                      |  | 5,976                  |   |  | --                     |   |  | --                          |  | --                  |  | 5,976        |  
|Excess tax benefits from stock-basedcompensation                                            |  | 1,647                  |   |  | --                     |   |  | --                          |  | --                  |  | 1,647        |  
|Common dividends paid                                                                       |  | (5,468                 | ) |  | --                     |   |  | --                          |  | --                  |  | (5,468       | )
|                                                                                            |  |                        |   |  |                        |   |  |                             |  |                     |  |              |  
|Net cash provided by financing activities                                                   |  | 866                    |   |  | --                     |   |  | --                          |  | --                  |  | 866          |  
|                                                                                            |  |                        |   |  |                        |   |  |                             |  |                     |  |              |  
|Decrease in cash and cash equivalents                                                       |  | (62,751                | ) |  | (1,023                 | ) |  | --                          |  | --                  |  | (63,774      | )
|Cash and cash equivalents at beginning of period                                            |  | 78,569                 |   |  | 5,570                  |   |  | --                          |  | --                  |  | 84,139       |  
|                                                                                            |  |                        |   |  |                        |   |  |                             |  |                     |  |              |  
|Cash and cash equivalents at end of period                                                  |  | $   15,818             |   |  | $     4,547            |   |  | $--                         |  | $--                 |  | $   20,365   |  
|                                                                                            |  |                        |   |  |                        |   |  |                             |  |                     |  |              |  



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EXHIBIT A

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors

Texas Industries, Inc.

We have reviewed the accompanying consolidated balance sheet of Texas Industries, Inc. and subsidiaries (the Company) as of
February 29, 2008, and the related consolidated statements of operations for the three- and nine-month periods ended February 29, 2008 and February 28, 2007 and cash flows for the nine-month periods ended February 29, 2008 and
February 28, 2007. These financial statements are the responsibility of the Companys management.

We conducted our review in
accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for
financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board, the objective of which is the expression of an opinion regarding the
financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any
material modifications that should be made to the consolidated interim financial statements referred to above for them to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of Texas Industries, Inc. and
subsidiaries as of May 31, 2007, and the related consolidated statements of operations, shareholders equity, and cash flows for the year then ended [not presented herein], and in our report dated July 10, 2007, we expressed an
unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of May 31, 2007, is fairly stated, in all material respects, in relation to the
consolidated balance sheet from which it has been derived.

/s/ Ernst & Young LLP

Dallas, Texas

March 26, 2008



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MANAGEMENTS DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

GENERAL

We are a leading
supplier of heavy building construction materials in the United States through three business segments: cement, aggregates and consumer products. Our principal products are gray portland cement, produced and sold through our cement segment; stone,
sand and gravel, produced and sold through our aggregates segment; and ready-mix concrete, produced and sold through our consumer products segment. Other products include expanded shale and clay aggregates, produced and sold through our aggregates
segment, and packaged concrete and related products produced and sold through our consumer products segment. Our facilities are concentrated primarily in Texas, Louisiana and California.

RESULTS OF OPERATIONS

The following table highlights certain
operating information relating to our products.



|                                  |  |                    |   |  |                   |   |  |              |   |  |              |  
|--------------------------------- |  | ------------------ | - |  | ----------------- | - |  | ------------ | - |  | ------------ | -
|                                  |  | Three months ended |   |  | Nine months ended |  
|                                  |  | February 29,       |   |  | February 28,      |   |  | February 29, |   |  | February 28, |  
|In thousands except per unit      |  | 2008               |   |  | 2007              |   |  | 2008         |   |  | 2007         |  
|Sales                             |  |                    |   |  |                   |   |  |              |   |  |              |  
|Cement                            |  | $103,891           |   |  | $107,143          |   |  | $349,900     |   |  | $355,828     |  
|Stone, sand and gravel            |  | 37,699             |   |  | 33,043            |   |  | 120,827      |   |  | 113,832      |  
|Ready-mix concrete                |  | 69,699             |   |  | 57,007            |   |  | 233,922      |   |  | 202,591      |  
|Other products                    |  | 30,155             |   |  | 26,048            |   |  | 93,705       |   |  | 88,717       |  
|Interplant                        |  | (30,488            | ) |  | (23,890           | ) |  | (97,670      | ) |  | (85,414      | )
|Delivery fees                     |  | 19,579             |   |  | 17,420            |   |  | 61,778       |   |  | 58,701       |  
|                                  |  |                    |   |  |                   |   |  |              |   |  |              |  
|Net Sales                         |  | $230,535           |   |  | $216,771          |   |  | $762,462     |   |  | $734,255     |  
|                                  |  |                    |   |  |                   |   |  |              |   |  |              |  
|                                  |  |                    |   | 
|Shipments                         |  |                    |   |  |                   |   |  |              |   |  |              |  
|Cement (tons)                     |  | 1,142              |   |  | 1,122             |   |  | 3,751        |   |  | 3,749        |  
|Stone, sand and gravel (tons)     |  | 5,010              |   |  | 4,527             |   |  | 16,424       |   |  | 16,561       |  
|Ready-mix concrete (cubic yards)  |  | 857                |   |  | 736               |   |  | 2,905        |   |  | 2,695        |  
|                                  |  |                    |   | 
|Prices                            |  |                    |   |  |                   |   |  |              |   |  |              |  
|Cement ($/ton)                    |  | $    91.01         |   |  | $    95.50        |   |  | $    93.28   |   |  | $    94.91   |  
|Stone, sand and gravel ($/ton)    |  | 7.52               |   |  | 7.30              |   |  | 7.36         |   |  | 6.87         |  
|Ready-mix concrete ($/cubic yard) |  | 81.26              |   |  | 77.49             |   |  | 80.50        |   |  | 75.19        |  
|                                  |  |                    |   | 
|Cost of sales                     |  |                    |   |  |                   |   |  |              |   |  |              |  
|Cement ($/ton)                    |  | $    67.13         |   |  | $    61.98        |   |  | $    70.38   |   |  | $    64.10   |  
|Stone, sand and gravel ($/ton)    |  | 6.92               |   |  | 6.56              |   |  | 6.00         |   |  | 5.59         |  
|Ready-mix concrete ($/cubic yard) |  | 79.15              |   |  | 76.38             |   |  | 75.91        |   |  | 71.80        |  



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Gross Profit

Gross profit for the three-month period ended February 29, 2008 was $39.6 million, a decrease of $7.5 million from the prior year period. Gross profit for the nine-month period ended
February 29, 2008 was $145.8 million, a decrease of $19.4 million from the prior year period. Average prices for our stone, sand and gravel and ready-mix concrete products improved in the current three-month and nine-month periods, and
shipments for all of our major products improved in the current three-month period. These improvements were offset in the periods by production inefficiencies at our old Oro Grande, California cement plant and higher maintenance costs in our cement
operations and higher fuel and transportation costs in all of our operations.

Sales.Net sales for the three-month
period ended February 29, 2008 were $230.5 million, an increase of $13.8 million from the prior year period. Total cement sales decreased $3.3 million on 5% lower average prices and 2% higher shipments. Total stone, sand and gravel sales
increased $4.7 million on 3% higher average prices and 11% higher shipments. Total ready-mix concrete sales increased $12.7 million on 5% higher average prices and 16% higher volume.

Net sales for the nine-month period ended February 29, 2008 were $762.5 million, an increase of $28.2 million from the prior year
period. Total cement sales decreased $5.9 million on 2% lower average prices and comparable shipments. Total stone, sand and gravel sales increased $7.0 million on 7% higher average prices and 1% lower shipments. Total ready-mix concrete sales
increased $31.3 million on 7% higher average prices and 8% higher volumes.

We experienced favorable weather conditions in
our Texas market area during the current three-month period. Shipments of all of our major products increased. The decline in average prices for cement during the current periods compared to the prior year periods is due to a shift in the mix of
cement products and markets.

Cost of Products Sold.Cost of products sold for the three-month period ended
February 29, 2008 was $191.0 million, an increase of $21.3 million from the prior year period. Cement unit costs increased 8%. Stone, sand and gravel unit costs increased 5%. Ready-mix concrete unit costs increased 4%.

Cost of products sold for the nine-month period ended February 29, 2008 was $616.7 million, an increase of $47.6 million from the
prior year period. Cement unit costs increased 10%. Stone, sand and gravel unit costs increased 7%. Ready-mix concrete unit costs increased 6%.

Cement unit costs increased in the current periods primarily as a result of the production inefficiencies at our old Oro Grande, California cement plant and higher maintenance, fuel and transportation costs. Stone,
sand and gravel overall unit costs increased in the current periods primarily as a result of higher fuel and transportation costs. Ready-mix concrete unit costs increased primarily as a result of higher distribution, raw material and transportation
costs.

Selling, General and Administrative

Selling, general and administrative expense for the three-month period ended February 29, 2008 was $20.7 million, a decrease of $6.8 million from the prior year period. Operating selling,
general and administrative expense for the three-month period ended February 29, 2008 was $14.6 million, a decrease of $1.5 million from the prior year period. The decrease was primarily the result of lower incentive compensation expense.
Corporate selling, general and administrative expense for the three-month period ended February 29, 2008 was $6.1 million, a decrease of $5.3 million from the prior year period. The decrease was primarily the result of $5.4 million lower
stock-based compensation expense due to the impact of changes in our stock price.

Selling, general and administrative
expense for the nine-month period ended February 29, 2008 was $64.0 million, a decrease of $14.7 million from the prior year period. Operating selling, general and administrative expense for the nine-month period ended February 29, 2008
was $44.7 million, a decrease of $400,000 from the prior period. The decrease was primarily the result of $3.4 million lower incentive expense offset in part by higher general expenses. Corporate selling, general and administrative expense for the
nine-month period ended February 29, 2008 was $19.3 million, a decrease of $14.3 million from the prior period. The decrease was primarily the result of $13.3 million lower stock-based compensation expense due to the impact of changes in our
stock price and $2.3 million lower incentive compensation expense, offset in part by higher wages.



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Other Income

Other income for the three-month period ended February 29, 2008 was $2.1 million, a decrease of $1.2 million from the prior year period primarily as a result of lower corporate interest and
real estate income. Other income for the nine-month period ended February 29, 2008 was $7.8 million, a decrease of $23.8 million from the prior year period. Other income in the prior year nine-month period included operating other income of
$19.8 million representing distributions which we received pursuant to agreements that settled a 16-year dispute over the U.S. antidumping duty order on cement imports from Mexico.

Interest Expense

Interest incurred for the three-month and
nine-month periods ended February 29, 2008 was $7.5 million and $20.8 million, respectively, all of which was capitalized in conjunction with our Oro Grande, California and Hunter, Texas cement plant expansion projects. Interest incurred for
the three-month and nine-month periods ended February 28, 2007 was $7.0 million and $21.6 million, respectively, of which $3.7 million and $8.1 million, respectively, was capitalized.

Income Taxes

Federal income taxes for the interim periods
ended February 29, 2008 and February 28, 2007 have been included in the accompanying financial statements on the basis of an estimated annual rate. The primary reason that the tax rate differs from the 35% statutory corporate rate is due
to percentage depletion that is tax deductible, state income taxes and deductions for income from qualified domestic production activities. Our estimated effective tax rate for 2008 is 31.1% compared to 31.2% for 2007.

LIQUIDITY AND CAPITAL RESOURCES

To improve liquidity and provide more financial and operating flexibility, we entered into a term credit agreement on March 20, 2008 that provides for an unsecured $150 million senior term loan maturing through August 15, 2012. In
addition to cash and cash equivalents of $9.6 million at February 29, 2008 and the proceeds from the new senior term loan, our sources of liquidity include cash from operations, borrowings available under our $200 million senior revolving
credit facility and distributions available from our investments in life insurance contracts.

Senior Revolving Credit
Facility.On August 15, 2007, we amended and restated our June 30, 2005 credit agreement. The amended and restated credit agreement continues to provide for a $200 million senior revolving credit facility, but the credit facility is no
longer secured and the principal amount may be increased by up to an additional $100 million at our option, provided that the lenders that are parties to the amended and restated credit agreement and such additional lenders as are invited by us and
approved by the administrative agent provide commitments for the additional principal amount. The credit facility expires on August 15, 2012. It includes a $50 million sub-limit for letters of credit. Any outstanding letters of credit are
deducted from the borrowing availability under the facility. At February 29, 2008, $85.0 million was outstanding under the facility and an additional $26.2 million of the facility was utilized to support letters of credit. Amounts drawn under
the facility bear interest either at the LIBOR rate plus a margin of .75% to 2%, or at a base rate (which is the higher of the federal funds rate plus 0.5% and the prime rate) plus a margin of up to 1%. The interest rate margins are subject to
adjustments based on our leverage ratio. All of our consolidated subsidiaries have guaranteed our obligations under the credit facility.

The credit facility contains covenants restricting, among other things, prepayment or redemption of the senior notes, distributions, dividends and repurchases of capital stock and other equity interests, acquisitions
and investments, indebtedness, liens and affiliate transactions. We are required to comply with certain financial tests and to maintain certain financial ratios, such as leverage and interest coverage ratios. We are in compliance with all of our
loan covenants.



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Term Credit Agreement.On March 20, 2008, we entered into a term credit
agreement that provides for an unsecured $150 million senior term loan maturing through August 15, 2012. The net proceeds were used to repay borrowings outstanding under our senior revolving credit facility in the amount of $85 million, with
the additional proceeds available for general corporate purposes. The outstanding principal amount of the term loan will bear interest either at LIBOR rate plus a margin of 2.25% or at a base rate (which will be the higher of the federal funds rate
plus 0.5% and the prime rate) plus a margin of 1.25% to 1.50%. The interest rate margins are based on our leverage ratio. We may repay the term loan at any time without penalty. We must mandatorily prepay the term loan in the amount of the net cash
proceeds from issuances of any additional senior notes or from certain asset sales. We must repay the outstanding principal amount of the term loan in eight quarterly payments of $1.9 million beginning on August 31, 2008, followed by eight
quarterly payments of $7.5 million beginning August 31, 2010, with $75.0 million due on August 15, 2012, the final maturity date of the term loan.

Similar to our senior revolving credit agreement, the term credit agreement contains a number of negative covenants restricting, among other things, prepayment or redemption of the senior notes,
distributions and dividends on and repurchases of capital stock and other equity interests, acquisitions and investments, indebtedness, liens and affiliate transactions. We are required to comply with certain financial tests and to maintain certain
financial ratios, such as leverage and interest coverage ratios.

Investments in Life Insurance Contracts.We have
purchased life insurance contracts in connection with certain of our benefit plans from which we can elect to receive distributions or we can elect to surrender policies for their net cash surrender values. During the nine-month period ended
February 29, 2008 we received $92.6 million from distributions or policy surrenders. At February 29, 2008, these contracts had a net cash surrender value of $17.8 million, of which approximately $10 million is available for distribution.

Capital Expenditure Commitments.During fiscal year 2006, we commenced construction on a project to expand and
modernize our Oro Grande, California cement plant. We are constructing approximately 2.3 million tons of advanced dry process annual cement production capacity, and plan to retire the 1.3 million tons of existing, but less efficient,
production after the new plant is commissioned. As of February 29, 2008, we have expended $408.4 million, excluding capitalized interest of $34.2 million related to the project, and have begun the commissioning process.

During October 2007, we commenced construction on a project to expand our Hunter, Texas cement plant. We are expanding the Hunter plant
by approximately 1.4 million tons of advanced dry process annual cement production capacity. The 900,000 tons of existing annual cement production capacity will remain in operation. We currently expect the Hunter project will cost from $325 to
$350 million, excluding estimated capitalized interest of $20 million related to the project. As of February 29, 2008, we have expended $44.5 million, excluding capitalized interest of $900,000 related to the project. We currently expect to
start commissioning the new kiln system during the winter of fiscal year 2010.

Capital expenditure commitments related to
normal replacement and technological upgrades of existing equipment and acquisitions to sustain our existing operations for fiscal year 2008 are currently estimated at approximately $75 million.

We expect cash and cash equivalents, the proceeds from our new senior term loan, cash from operations, available borrowings under our
senior revolving credit facility and available distributions from our investments in life insurance contracts to be sufficient to provide funds for capital expenditure commitments, scheduled debt payments, working capital needs and other general
corporate purposes for at least the next year.



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Cash Flows

Net cash provided by operating activities for the nine-month period ended February 29, 2008 was $76.3 million compared to $125.8 million for the prior year period. The decrease resulted
primarily from lower net income and changes in working capital items.

Net cash used by investing activities for the
nine-month period ended February 29, 2008 was $149.4 million compared to $190.4 million for the prior year period. Capital expenditures incurred in connection with the expansion and modernization of our Oro Grande, California cement plant were
$154.4 million, down $15.8 million from the prior year period. Capital expenditures incurred in connection with the expansion of our Hunter, Texas cement plant were $38.8 million, up $34.0 million from the prior year period. Capital expenditures for
normal replacement and technological upgrades of existing equipment and acquisitions to sustain our existing operations were $48.5 million, down $12.9 million from the prior year period. During the nine-month period ended February 29, 2008 we
received distributions from our investments in life insurance contracts totaling $92.6 million. In the prior year period, we decreased our investment in auction rate securities $50.5 million.

Net cash provided by financing activities for the nine-month period ended February 29, 2008 was $67.6 million compared to $900,000
for the prior year period. The increase resulted primarily from borrowings under our senior revolving credit facility.

OTHER ITEMS

Environmental Matters

We are subject to federal, state and local environmental laws, regulations and permits concerning, among other matters, air emissions and wastewater discharge. We intend to comply with these laws, regulations and
permits. However, from time to time we receive claims from federal and state environmental regulatory agencies and entities asserting that we are or may be in violation of certain of these laws, regulations and permits, or from private parties
alleging that our operations have injured them or their property. Based on our experience and the information currently available to us, we believe that such claims will not have a material impact on our financial condition or results of operations.
Despite our compliance and experience, it is possible that we could be held liable for future charges which might be material but are not currently known or estimable. In addition, changes in federal or state laws, regulations or requirements or
discovery of currently unknown conditions could require additional expenditures by us.

Market Risk

Historically, we have not entered into derivatives or other financial instruments for trading or speculative purposes. Because of the
short duration of our investments, changes in market interest rates would not have a significant impact on their fair value. The fair value of fixed rate debt will vary as interest rates change.

Our operations require large amounts of energy and are dependent upon energy sources, including electricity and fossil fuels. Prices for
energy are subject to market forces largely beyond our control. We have generally not entered into any long-term contracts to satisfy our fuel and electricity needs, with the exception of coal which we purchase from specific mines pursuant to
long-term contracts. However, we continually monitor these markets and we may decide in the future to enter into long-term contracts. If we are unable to meet our requirements for fuel and electricity, we may experience interruptions in our
production. Price increases or disruption of the uninterrupted supply of these products could adversely affect our results of operations.

Critical Accounting Policies

The preparation of financial statements and accompanying notes in conformity
with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported. Changes in the facts and circumstances could have a significant impact on the resulting financial statements. The
critical accounting policies that affect the more complex judgments and estimates are described in our Annual Report on Form 10-K for the year ended May 31, 2007.



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New Accounting Standards.

Accounting for Uncertainty in Income Taxes.Effective June 1, 2007, we adopted Financial Accounting Standards Board Interpretation 48, Accounting for Uncertainty in Income
Taxes. This interpretation clarifies the accounting for uncertainty in income taxes recognized in an enterprises financial statements in accordance with SFAS No. 109, Accounting for Income Taxes and prescribes a
recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. It also provides guidance on derecognition, classification, interest and
penalties, accounting in interim periods, disclosure and transition. We have no significant reserves for uncertain tax positions and no adjustments to such reserves were required upon adoption of this interpretation. Interest and penalties resulting
from audits by tax authorities have been immaterial and are included in income tax expense in the consolidated statements of operations.

Major Maintenance Activities.Effective June 1, 2007, we adopted Financial Accounting Standards Board FSP AUG AIR-1, Accounting for Planned Major Maintenance Activities. This FSP addresses the
planned major maintenance of assets and prohibits the use of the accrue-in-advance method of accounting for these activities. The adoption of this FSP did not have any impact on our consolidated financial statements.

Cautionary Statement for Purposes of the Safe Harbor

Provisions of the Private Securities Litigation Reform Act of 1995

Certain
statements contained in this quarterly report are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to risks, uncertainties and other factors, which could
cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Potential risks and uncertainties include, but are not limited to, the impact of competitive pressures and changing economic and
financial conditions on our business, the level of construction activity in our markets, abnormal periods of inclement weather, unexpected periods of equipment downtime, changes in the cost of raw materials, fuel and energy, the impact of
environmental laws and other regulations, and the risks and uncertainties described in Part I, Item 1A, Risk Factors of our Annual Report on Form 10-K for the year-ended May 31, 2007.



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Item 4.     Controls and Procedures

We maintain disclosure controls and
procedures designed to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the specified time periods. As of the end of the
period covered by this Quarterly Report on Form 10-Q, our Chief Executive Officer and Chief Financial Officer evaluated, with the participation of our management, the effectiveness of our disclosure controls and procedures (as defined in Exchange
Act Rules 13a-15(e) and 15d-15(e)). Based on the evaluation, which disclosed no significant deficiencies or material weaknesses, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are
effective. There were no significant changes in our internal controls over financial reporting that occurred during our most recent fiscal quarter that have materially affected or are reasonably likely to materially affect our internal control over
financial reporting.

PART II. OTHER INFORMATION

Item 2.     Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities. We did not purchase any of our Common Stock on the open market during the three-month period ended February 29, 2008. However, we repurchased shares of our Common Stock in connection with
so-called stock swap exercises of employee stock options in which shares are surrendered or deemed surrendered to us to pay the exercise price or to satisfy tax withholding obligations. The following table presents information with
respect to such repurchases.



|                                     |  |                                    |  |   |                                  |  |                                                                                  |  |                                                                               
|------------------------------------ |  | ---------------------------------- |  | - | -------------------------------- |  | -------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------
|Period                               |  | (a)TotalNumber of Shares Purchased |  |   | (b) Average Price Paid per Share |  | (c)Total Number of Shares Purchasedas Part of PubliclyAnnounced Plansor
Programs |  | (d)Maximum Numberof Shares that MayYet Be PurchasedUnder the Plans or Programs
|                                     |  |                                    |  |  
|December 1, 2007  December 31, 2007 |  | --                                 |  | $ | --                               |  | N/A                                                                              |  | N/A                                                                           
|January 1, 2008 - January 31, 2008   |  | 46,162                             |  |   | 52.31                            |  | N/A                                                                              |  | N/A                                                                           
|February 1, 2008  February 29, 2008 |  | --                                 |  |   | --                               |  | N/A                                                                              |  | N/A                                                                           
|                                     |  |                                    |  |   |                                  |  |                                                                                  |  |                                                                               
|Total                                |  | 46,162                             |  | $ | 52.31                            |  | N/A                                                                              |  | N/A                                                                           
|                                     |  |                                    |  |   |                                  |  |                                                                                  |  |                                                                               



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Item 6. Exhibits

The following exhibits are included herein:



|     |  |                                                                                                                                                                                                                                                                                                                                                                 
|---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1  |  | Articles of Incorporation (incorporated by reference to Exhibit 3.1 to Annual Report on Form 10-K dated August 28, 1996, File No. 001-04887)                                                                                                                                                                                                                    
|     | 
|3.2  |  | By-laws (incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K dated April 13, 2005, File No. 001-04887)                                                                                                                                                                                                                                       
|     | 
|3.3  |  | Amended and Restated Certificate of Designations of Series B Junior Participating Preferred Stock (incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K
filed on November 1, 2006)                                                                                                                                                            
|     | 
|4.1  |  | Form of Rights Agreement dated as of November 1, 2006, between Texas Industries, Inc. and Mellon Investor Services, LLC (incorporated by reference to Exhibit 4.1 to Current
Report on Form 8-K filed on October 20, 2006, File No. 001-04887)                                                                                                                  
|     | 
|4.2  |  | Form of the Companys 71/4% Senior Note due 2013
(incorporated by reference to Exhibit 4.1 to Current Report on Form 8-K dated June 29, 2005, File No. 001-04887)                                                                                                                                                                                               
|     | 
|4.3  |  | Form of the Companys Notation of Guarantee (incorporated by reference to Exhibit 4.2 to Current Report on Form 8-K dated June 29, 2005, File No.
001-04887)                                                                                                                                                                                                    
|     | 
|4.4  |  | Registration Rights Agreement, dated July 6, 2005, among the Company and the Initial Purchasers (incorporated by reference to Exhibit 4.3 to Current Report on Form 8-K dated
June 29, 2005, File No. 001-04887)                                                                                                                                                
|     | 
|4.5  |  | Indenture, dated July 6, 2005, among the Company, the Guarantors and Wells Fargo, National Association, as Trustee (incorporated by reference to Exhibit 4.4 to Current Report
on Form 8-K dated June 29, 2005, File No. 001-04887)                                                                                                                             
|     | 
|10.1 |  | Purchase Agreement, dated June 29, 2005, among the Company and the Initial Purchasers (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K dated June 29,
2005, File No. 001-04887)                                                                                                                                                         
|     | 
|10.2 |  | First Amended and Restated Credit Agreement, dated August 15, 2007, among the Company, Bank of America, N.A., as Administrative Agent and lender, L/C Issuer and Swing Line
Lender, UBS Securities LLC, as Syndication Agent, and certain lenders (incorporated by reference to Exhibit 10.1 to Report on Form 8-K filed on August 17, 2007, File No. 001-04887)
|     | 
|10.3 |  | Separation and Distribution Agreement, dated July 6, 2005, between the Company and Chaparral Steel Company (incorporated by reference to Exhibit 10.3 to Current Report on
Form 8-K dated June 29, 2005, File No. 001-04887)                                                                                                                                    
|     | 
|10.4 |  | Amendment No. 1 to Separation and Distribution Agreement dated as of July 27, 2005 (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K dated July 27,
2005, File No. 001-04887)                                                                                                                                                            
|     | 
|10.5 |  | Tax Sharing and Indemnification Agreement, dated July 6, 2005, between the Company and Chaparral Steel Company (incorporated by reference to Exhibit 10.4 to Current Report on
Form 8-K dated June 29, 2005, File No. 001-04887)                                                                                                                                
|     | 
|10.6 |  | Employment Agreement of Mel G. Brekhus (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on January 22, 2007)                                                                                                                                                                                                                      
|     | 
|10.7 |  | Texas Industries, Inc. 1993 Stock Option Plan (incorporated by reference to Exhibit 4.1 to Registration Statement on Form S-8 as filed May 19, 1994, File No.
033-53715)                                                                                                                                                                                        



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|      |  |                                                                                                                                                                                                                                                                                                          
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      | 
|10.8  |  | Texas Industries, Inc. 2004 Omnibus Equity Compensation Plan, as amended (incorporated by reference to Exhibit 10.9 to Quarterly Report on Form 10-Q filed on January 5,
2007)                                                                                                                           
|      | 
|10.9  |  | Form of Stock Option Agreement under Texas Industries, Inc. 2004 Omnibus Equity Compensation Plan (incorporated by reference to Exhibit 10.10 to Annual Report on Form 10-K
filed on July 25, 2006)                                                                                                      
|      | 
|10.10 |  | Form of Non-Employee Directors Restricted Stock Agreement (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K dated April 19, 2006)                                                                                                                                                 
|      | 
|10.11 |  | TXI Annual Incentive Plans-Fiscal Year 2008 (incorporated by reference to Exhibit 10.12 to Annual Report on Form 10-K filed on July 13, 2007)                                                                                                                                                            
|      | 
|10.12 |  | TXI Three Year Incentive Plan for the Three Consecutive Fiscal Year Periods Ending May 31, 2009 (incorporated by reference to Exhibit 10.14 to Annual Report on Form 10-K
filed on July 25, 2006)                                                                                                        
|      | 
|10.13 |  | TXI Three Year Incentive Plan for the Three Consecutive Fiscal Year Periods Ending May 31, 2008, as amended (incorporated by reference to Exhibit 10.15 to Annual Report on
Form 10-K filed on July 25, 2006)                                                                                            
|      | 
|10.14 |  | TXI Three Year Incentive Plan for the Three Consecutive Fiscal Year Periods Ending May 31, 2010 (incorporated by reference to Exhibit 10.15 to Annual Report on Form 10-K
filed on July 13, 2007)                                                                                                        
|      | 
|10.15 |  | Master Performance-Based Incentive Plan (incorporated by reference to Appendix A to definitive proxy statement filed on August 25, 2006)                                                                                                                                                                 
|      | 
|10.16 |  | Texas Industries, Inc. 2003 Share Appreciation Rights Plan (incorporated by reference to Exhibit 10.15 to Annual Report on Form 10-K filed on August 12, 2005, File No.
001-04887)                                                                                                                       
|      | 
|10.17 |  | Form of SAR Agreement for Non-Employee Directors under Texas Industries, Inc. 2003 Share Appreciation Rights Plan (incorporated by reference to Exhibit 10.16 to Annual Report
on Form 10-K filed on August 12, 2005, File No. 001-04887)                                                                
|      | 
|10.18 |  | Form of Amendment No. 1 to SAR Agreement for Non-Employee Directors Under Texas Industries, Inc. 2003 Stock Appreciation Rights Plan (incorporated by reference to Exhibit
10.6 to Current Report on Form 8-K dated April 19, 2006)                                                                      
|      | 
|10.19 |  | SAR Agreement for Employee Directors Under Texas Industries, Inc. 2003 Stock Appreciation Rights Plan between Texas Industries, Inc. and Mel G. Brekhus, dated June 1, 2004
(incorporated by reference to Exhibit 10.22 to Annual Report on Form 10-K filed on July 25, 2006)                            
|      | 
|10.20 |  | Amendment No. 1 to SAR Agreement for Employee Directors Under Texas Industries, Inc. 2003 Stock Appreciation Rights Plan, by and between Texas Industries, Inc. and Mel G.
Brekhus dated April 24, 2006 (incorporated by reference to Exhibit 10.23 to Annual Report on Form 10-K filed on July 25, 2006)
|      | 
|10.21 |  | Contract, dated September 27, 2005, between Riverside Cement Company and Oro Grande Contractors (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K dated
September 27, 2005, noting that portions of the exhibit were omitted pursuant to a request for confidential treatment)    
|      | 
|10.22 |  | Deferred Compensation Plan for Directors of Texas Industries, Inc. (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K dated January 18,
2006)                                                                                                                                      
|      | 
|10.23 |  | Form of 2005 Executive Financial Security Plan (Annuity Formula) (incorporated by reference to Exhibit 10.25 to Quarterly Report on Form 10-Q filed on January 5,
2007)                                                                                                                                  
|      | 
|10.24 |  | Form of 2005 Executive Financial Security Plan (Lump Sum Formula) (incorporated by reference to Exhibit 10.26 to Quarterly Report on Form 10-Q filed on January 5,
2007)                                                                                                                                 
|      | 
|10.25 |  | Form of Change in Control Severance Agreement (incorporated by reference to Exhibit 10.3 to Current Report on Form 8-K dated April 19, 2006)                                                                                                                                                             



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|      |  |                                                                                                                                                                                                                                                                                                                                                                                                
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      | 
|10.26 |  | Amendment No. 2 to SAR Agreement for Employee Directors Under Texas Industries, Inc. 2003 Stock Appreciation Rights Plan, between Texas Industries, Inc. and Mel G. Brekhus
dated July 11, 2007 (incorporated by reference to Exhibit 10.27 to Annual Report on Form 10-K filed on July 13, 2007)                                                                                              
|      | 
|10.27 |  | Contract, signed September 21, 2007, between TXI Operations, LP and Amec-Zachry Contractors (incorporated by reference to Exhibit 10.28 to Quarterly Report on Form 10-Q filed
on September 27, 2007, noting that portions of the exhibit have been omitted pursuant to a request for confidential treatment)                                                                                  
|      | 
|10.28 |  | First Amendment to First Amended and Restated Credit Agreement dated as of January 28, 2008 among the Company, Bank of America, N.A., as Administrative Agent, Swing Line
Lender, L/C Issuer and lender and other lenders (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K dated January 28, 2008)                                                                     
|      | 
|10.29 |  | Second Amendment to First Amended and Restated Credit Agreement dated as of March 20, 2008 among the Company, Bank of America, N.A., as Administrative Agent, Swing Line
Lender, L/C Issuer and lender and other lenders (incorporated by reference to Exhibit 10.2 to Current Report on Form 8-K dated March 20, 2008)                                                                        
|      | 
|10.30 |  | Term Credit Agreement dated as of March 20, 2008 among the Company, Bank of America, N.A., as Administrative Agent and lender, Wachovia Bank, National Association, as
Syndication Agent and lender, Wells Fargo Bank, National Association, as Documentation Agent and lender and other lenders (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K dated March 20, 2008)
|      | 
|12.1  |  | Computation of Ratios of Earnings to Fixed Charges                                                                                                                                                                                                                                                                                                                                             
|      | 
|15.1  |  | Letter re: Unaudited Interim Financial Information                                                                                                                                                                                                                                                                                                                                             
|      | 
|31.1  |  | Certification of Chief Executive Officer                                                                                                                                                                                                                                                                                                                                                       
|      | 
|31.2  |  | Certification of Chief Financial Officer                                                                                                                                                                                                                                                                                                                                                       
|      | 
|32.1  |  | Section 1350 Certification of Chief Executive Officer                                                                                                                                                                                                                                                                                                                                          
|      | 
|32.2  |  | Section 1350 Certification of Chief Financial Officer                                                                                                                                                                                                                                                                                                                                          

The remaining exhibits have been omitted because they are not applicable or the
information required therein is included elsewhere in the financial statements or notes thereto.



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##### Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant
has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



|               |  |  |  |                                                                                                              
|-------------- |  |  |  | -------------------------------------------------------------------------------------------------------------
|               |  |  |  | TEXAS INDUSTRIES, INC.                                                                                       
|               |  | 
|March 27, 2008 |  |  |  | /s/ Richard M. Fowler                                                                                        
|               |  |  |  | Richard M. Fowler Executive Vice President - Financeand Chief Financial Officer (Principal Financial Officer)
|               |  | 
|March 27, 2008 |  |  |  | /s/ James R. McCraw                                                                                          
|               |  |  |  | James R. McCraw Vice
President  Accounting and Risk Management (Principal Accounting Officer)               



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INDEX TO EXHIBITS



|               |  |                                                                                                                                                                                                                                                                                                                                                                 
|-------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit Number |  |                                                                                                                                                                                                                                                                                                                                                                 
|               | 
|3.1            |  | Articles of Incorporation (incorporated by reference to Exhibit 3.1 to Annual Report on Form 10-K dated August 28, 1996, File No. 001-04887)                                                                                                                                                                                                                    
|               | 
|3.2            |  | By-laws (incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K dated April 13, 2005, File No. 001-04887)                                                                                                                                                                                                                                       
|               | 
|3.3            |  | Amended and Restated Certificate of Designations of Series B Junior Participating Preferred Stock (incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K
filed on November 1, 2006)                                                                                                                                                            
|               | 
|4.1            |  | Form of Rights Agreement dated as of November 1, 2006, between Texas Industries, Inc. and Mellon Investor Services, LLC (incorporated by reference to Exhibit 4.1 to Current
Report on Form 8-K filed on October 20, 2006, File No. 001-04887)                                                                                                                  
|               | 
|4.2            |  | Form of the Companys 71/4% Senior Note due 2013
(incorporated by reference to Exhibit 4.1 to Current Report on Form 8-K dated June 29, 2005, File No. 001-04887)                                                                                                                                                                                               
|               | 
|4.3            |  | Form of the Companys Notation of Guarantee (incorporated by reference to Exhibit 4.2 to Current Report on Form 8-K dated June 29, 2005, File No.
001-04887)                                                                                                                                                                                                    
|               | 
|4.4            |  | Registration Rights Agreement, dated July 6, 2005, among the Company and the Initial Purchasers (incorporated by reference to Exhibit 4.3 to Current Report on Form 8-K dated
June 29, 2005, File No. 001-04887)                                                                                                                                                
|               | 
|4.5            |  | Indenture, dated July 6, 2005, among the Company, the Guarantors and Wells Fargo, National Association, as Trustee (incorporated by reference to Exhibit 4.4 to Current Report
on Form 8-K dated June 29, 2005, File No. 001-04887)                                                                                                                             
|               | 
|10.1           |  | Purchase Agreement, dated June 29, 2005, among the Company and the Initial Purchasers (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K dated June 29,
2005, File No. 001-04887)                                                                                                                                                         
|               | 
|10.2           |  | First Amended and Restated Credit Agreement, dated August 15, 2007, among the Company, Bank of America, N.A., as Administrative Agent and lender, L/C Issuer and Swing Line
Lender, UBS Securities LLC, as Syndication Agent, and certain lenders (incorporated by reference to Exhibit 10.1 to Report on Form 8-K filed on August 17, 2007, File No. 001-04887)
|               | 
|10.3           |  | Separation and Distribution Agreement, dated July 6, 2005, between the Company and Chaparral Steel Company (incorporated by reference to Exhibit 10.3 to Current Report on
Form 8-K dated June 29, 2005, File No. 001-04887)                                                                                                                                    
|               | 
|10.4           |  | Amendment No. 1 to Separation and Distribution Agreement dated as of July 27, 2005 (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K dated July 27,
2005, File No. 001-04887)                                                                                                                                                            
|               | 
|10.5           |  | Tax Sharing and Indemnification Agreement, dated July 6, 2005, between the Company and Chaparral Steel Company (incorporated by reference to Exhibit 10.4 to Current Report on
Form 8-K dated June 29, 2005, File No. 001-04887) )                                                                                                                              
|               | 
|10.6           |  | Employment Agreement of Mel G. Brekhus (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on January 22, 2007)                                                                                                                                                                                                                      



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---

##### Table of Contents

Index to Exhibits-(Continued)



|               |  | 
|-------------- |  | 
|Exhibit Number |  | 

|      |  |                                                                                                                                                                                                                                                                                                          
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      | 
|10.7  |  | Texas Industries, Inc. 1993 Stock Option Plan (incorporated by reference to Exhibit 4.1 to Registration Statement on Form S-8 as filed May 19, 1994, File No.
033-53715)                                                                                                                                 
|      | 
|10.8  |  | Texas Industries, Inc. 2004 Omnibus Equity Compensation Plan, as amended (incorporated by reference to Exhibit 10.9 to Quarterly Report on Form 10-Q filed on January 5, 2007)                                                                                                                           
|      | 
|10.9  |  | Form of Stock Option Agreement under Texas Industries, Inc. 2004 Omnibus Equity Compensation Plan (incorporated by reference to Exhibit 10.10 to Annual Report on Form 10-K
filed on July 25, 2006)                                                                                                      
|      | 
|10.10 |  | Form of Non-Employee Directors Restricted Stock Agreement (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K dated April 19, 2006)                                                                                                                                                 
|      | 
|10.11 |  | TXI Annual Incentive Plans-Fiscal Year 2008 (incorporated by reference to Exhibit 10.12 to Annual Report on Form 10-K filed on July 13, 2007)                                                                                                                                                            
|      | 
|10.12 |  | TXI Three Year Incentive Plan for the Three Consecutive Fiscal Year Periods Ending May 31, 2009 (incorporated by reference to Exhibit 10.14 to Annual Report on Form 10-K
filed on July 25, 2006)                                                                                                        
|      | 
|10.13 |  | TXI Three Year Incentive Plan for the Three Consecutive Fiscal Year Periods Ending May 31, 2008, as amended (incorporated by reference to Exhibit 10.15 to Annual Report on
Form 10-K filed on July 25, 2006)                                                                                            
|      | 
|10.14 |  | TXI Three Year Incentive Plan for the Three Consecutive Fiscal Year Periods Ending May 31, 2010 (incorporated by reference to Exhibit 10.15 to Annual Report on Form 10-K
filed on July 13, 2007)                                                                                                        
|      | 
|10.15 |  | Master Performance-Based Incentive Plan (incorporated by reference to Appendix A to definitive proxy statement filed on August 25, 2006)                                                                                                                                                                 
|      | 
|10.16 |  | Texas Industries, Inc. 2003 Share Appreciation Rights Plan (incorporated by reference to Exhibit 10.15 to Annual Report on Form 10-K filed on August 12, 2005, File No.
001-04887)                                                                                                                       
|      | 
|10.17 |  | Form of SAR Agreement for Non-Employee Directors under Texas Industries, Inc. 2003 Share Appreciation Rights Plan (incorporated by reference to Exhibit 10.16 to Annual Report
on Form 10-K filed on August 12, 2005, File No. 001-04887)                                                                
|      | 
|10.18 |  | Form of Amendment No. 1 to SAR Agreement for Non-Employee Directors Under Texas Industries, Inc. 2003 Stock Appreciation Rights Plan (incorporated by reference to Exhibit
10.6 to Current Report on Form 8-K dated April 19, 2006)                                                                      
|      | 
|10.19 |  | SAR Agreement for Employee Directors Under Texas Industries, Inc. 2003 Stock Appreciation Rights Plan between Texas Industries, Inc. and Mel G. Brekhus, dated June 1, 2004
(incorporated by reference to Exhibit 10.22 to Annual Report on Form 10-K filed on July 25, 2006)                            
|      | 
|10.20 |  | Amendment No. 1 to SAR Agreement for Employee Directors Under Texas Industries, Inc. 2003 Stock Appreciation Rights Plan, by and between Texas Industries, Inc. and Mel G.
Brekhus dated April 24, 2006 (incorporated by reference to Exhibit 10.23 to Annual Report on Form 10-K filed on July 25, 2006)
|      | 
|10.21 |  | Contract, dated September 27, 2005, between Riverside Cement Company and Oro Grande Contractors (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K dated
September 27, 2005, noting that portions of the exhibit were omitted pursuant to a request for confidential treatment)    
|      | 
|10.22 |  | Deferred Compensation Plan for Directors of Texas Industries, Inc. (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K dated January 18,
2006)                                                                                                                                      



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---

##### Table of Contents

Index to Exhibits-(Continued)



|               |  | 
|-------------- |  | 
|Exhibit Number |  | 

|      |  |                                                                                                                                                                                                                                                                                                                                                                                                
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      | 
|10.23 |  | Form of 2005 Executive Financial Security Plan (Annuity Formula) (incorporated by reference to Exhibit 10.25 to Quarterly Report on Form 10-Q filed on January 5,
2007)                                                                                                                                                                                                                        
|      | 
|10.24 |  | Form of 2005 Executive Financial Security Plan (Lump Sum Formula) (incorporated by reference to Exhibit 10.26 to Quarterly Report on Form 10-Q filed on January 5,
2007)                                                                                                                                                                                                                       
|      | 
|10.25 |  | Form of Change in Control Severance Agreement (incorporated by reference to Exhibit 10.3 to Current Report on Form 8-K dated April 19, 2006)                                                                                                                                                                                                                                                   
|      | 
|10.26 |  | Amendment No. 2 to SAR Agreement for Employee Directors Under Texas Industries, Inc. 2003 Stock Appreciation Rights Plan, between Texas Industries, Inc. and Mel G. Brekhus
dated July 11, 2007 (incorporated by reference to Exhibit 10.27 to Annual Report on Form 10-K filed on July 13, 2007)                                                                                              
|      | 
|10.27 |  | Contract, signed September 21, 2007, between TXI Operations, LP and Amec-Zachry Contractors (incorporated by reference to Exhibit 10.28 to Quarterly Report on Form 10-Q filed
on September 27, 2007, noting that portions of the exhibit have been omitted pursuant to a request for confidential treatment)                                                                                  
|      | 
|10.28 |  | First Amendment to First Amended and Restated Credit Agreement dated as of January 28, 2008 among the Company, Bank of America, N.A., as Administrative Agent, Swing Line
Lender, L/C Issuer and lender and other lenders (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K dated January 28, 2008)                                                                     
|      | 
|10.29 |  | Second Amendment to First Amended and Restated Credit Agreement dated as of March 20, 2008 among the Company, Bank of America, N.A., as Administrative Agent, Swing Line
Lender, L/C Issuer and lender and other lenders (incorporated by reference to Exhibit 10.2 to Current Report on Form 8-K dated March 20, 2008)                                                                        
|      | 
|10.30 |  | Term Credit Agreement dated as of March 20, 2008 among the Company, Bank of America, N.A., as Administrative Agent and lender, Wachovia Bank, National Association, as
Syndication Agent and lender, Wells Fargo Bank, National Association, as Documentation Agent and lender and other lenders (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K dated March 20, 2008)
|      | 
|12.1  |  | Computation of Ratios of Earnings to Fixed Charges                                                                                                                                                                                                                                                                                                                                             
|      | 
|15.1  |  | Letter re: Unaudited Interim Financial Information                                                                                                                                                                                                                                                                                                                                             
|      | 
|31.1  |  | Certification of Chief Executive Officer                                                                                                                                                                                                                                                                                                                                                       
|      | 
|31.2  |  | Certification of Chief Financial Officer                                                                                                                                                                                                                                                                                                                                                       
|      | 
|32.1  |  | Section 1350 Certification of Chief Executive Officer                                                                                                                                                                                                                                                                                                                                          
|      | 
|32.2  |  | Section 1350 Certification of Chief Financial Officer                                                                                                                                                                                                                                                                                                                                          



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